When it comes to navigating through volatile market conditions, having a solid cushion in the form of dividend-paying stocks can provide much-needed stability for your investment portfolio. However, identifying the right dividend stocks that offer long-term growth potential and consistent cash flows to support dividends can be a challenging task. This is where the expertise of Wall Street analysts comes into play, as they are able to analyze companies and recommend stocks that meet these criteria.
One dividend stock that has caught the attention of Wall Street analysts is OneMain Holdings (OMF), a financial services company catering to non-prime customers. With an attractive dividend yield of 8.1%, OMF has been actively repurchasing shares in addition to paying regular dividends. Analysts like RBC Capital's Kenneth Lee have updated their models and price targets for OMF, citing a positive macro outlook. Lee's buy rating on the stock is backed by OMF's strong business model, capital generation ability, and potential for growth in the non-prime personal loan markets.
Retail giant Walmart (WMT) is another dividend stock that has been making headlines with its recent announcement of a 9% increase in its annual dividend, marking its 51st consecutive year of dividend raises. With a dividend yield of 1.4%, WMT has been attracting attention from analysts like Jefferies' Corey Tarlowe, who reiterated a buy rating on the stock. Tarlowe's positive outlook is backed by Walmart's stable consumer base, improved e-commerce operations, and the potential for growth in its international segment. Additionally, he sees a significant opportunity for Walmart in the advertising business, which has been showing strong growth potential.
Oilfield services company Schlumberger (SLB) is a third dividend stock that has been gaining traction among investors. With a dividend yield of 2% and a recent increase in its quarterly cash dividend, SLB has been added to Goldman Sachs' Conviction List. Analyst Neil Mehta sees SLB as a strong player in the energy services industry, with a promising outlook for growth in international and offshore services. Mehta also highlights SLB's strong free cash flow generation, which can drive further capital returns and growth investments. He believes that SLB's digital business is an undervalued asset that can bring additional value to the company in the future.
Dividend-paying stocks can play a crucial role in optimizing your investment portfolio, especially during times of market volatility. By considering the recommendations of top Wall Street analysts and focusing on companies with strong growth potential and stable cash flows, investors can build a resilient portfolio that can weather the highs and lows of the market.