Dividend stocks have long been a favorite for investors seeking reliable, recurring passive income. However, not all dividend-paying companies are equal. Some stand out by offering higher yields, while others are known for their consistent and steady payouts.
The real challenge lies in finding stocks that combine these attributes with an analyst “buy” rating, which can be game-changers for any income-focused portfolio. These companies will likely reward their shareholders with generous distributions - and moreover, they have earned the confidence of analysts, evidenced by consensus “strong buy” ratings. This vote of confidence from Wall Street indicates that these stocks have solid potential for both dividend growth and stability, making them attractive choices for long-term investors.
To identify these opportunities, I used Barchart’s Stock Screener Tool to narrow down the top dividend stocks with yields of 7% or more, and consensus “buy” ratings from analysts. After running the scan, I identified two standout picks: Enterprise Products Partners (EPD) and CTO Realty Growth (CTO).
Let’s examine these dividend stocks more closely, and discover why they can significantly boost the performance of your income portfolio.
#1. Enterprise Products Partners
With stable earnings, a solid dividend payment and growth history, and significant future growth potential, Enterprise Products Partners (EPD) is a reliable high-yield dividend stock.
The company provides midstream energy services, handling the transportation, storage, and processing of crude oil (CLU24), natural gas (NGU24), and refined products. This diversified energy infrastructure company benefits from long-term fee-based contracts that provide steady revenue streams, helping to insulate it from commodity price fluctuations and inflation.
EPD’s resilience in the face of market volatility enables it to maintain stable cash flows, a key component of its strong dividend payments.
With a dividend yield of 7.13%, this energy company has a proven history of rewarding its shareholders. It has increased its dividend distribution for 26 consecutive years at an attractive CAGR of 7%. Further, it is well-positioned to grow its dividend in the coming years.
The company’s investments in midstream infrastructure provide attractive long-term returns. In 2023 alone, EPD invested $2.9 billion in growth capital expenditures. Management plans to invest even more in 2024, with an allocation between $3.25 billion and $3.75 billion for organic growth projects, bolstering its infrastructure to support future cash flow. Additionally, EPD's strategic acquisitions will likely enhance its assets, drive its earnings, and increase its capacity to return capital to shareholders.
Wall Street is emphatically bullish about EPD’s prospects. Twelve out of 16 analysts covering EPD stock have rated it as a "Strong Buy," while two recommend it as a “Moderate Buy,” and two maintain a “Hold” rating.
Enterprise Products Partners offers a compelling case for long-term, income-oriented investors.
#2. CTO Realty Growth
CTO Realty Growth (CTO) is a real estate investment trust (REIT). It focuses on owning and operating high-quality, retail-based properties across some of the fastest-growing markets in the U.S.
CTO’s portfolio consists of large-format, multi-tenant properties anchored by grocery stores, retailers, and community-oriented retail hubs. These properties also have mixed-use components that help drive consistent foot traffic and diversify tenant types.
Beyond its core retail-focused portfolio, CTO Realty has a stake in Alpine Income Property Trust (PINE), another REIT. This provides an additional avenue for growth for the company.
CTO Realty is focusing on acquiring properties in high-growth markets with solid yields. These acquisitions will likely provide attractive returns from the current rental income and potential value enhancements. Further, CTO is targeting properties poised to benefit from vacancy lease-ups, higher rentals, and redevelopments. This strategy allows the company to steadily improve the cash flow from its properties, driving its payouts.
CTO’s portfolio consists of 20 properties, boasting an impressive occupancy rate. The company recently announced that leased occupancy has increased to 96% compared to 94.6% as of June 30. This increase in occupancy underscores the solid demand for its properties and its ability to secure new leases and renewals, providing a solid foundation for its earnings growth.
Offering a yield of 7.93%, this REIT has paid dividends for 48 consecutive years, demonstrating its commitment to returning value to shareholders. Further, its well-staggered debt maturity schedule also gives it flexibility to reinvest in growth opportunities while maintaining its ability to deliver steady dividend payouts.
CTO has garnered positive ratings from Wall Street. Out of six analysts in coverage, four rate the stock as a "strong buy," with one assigning a "moderate buy," and one a "hold."
This bullish sentiment reflects confidence in the company's strategy, growth prospects, and future dividend distribution potential.
On the date of publication, Amit Singh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
