High dividend stocks appeal to many investors. But as well as a high payout, it is crucial that you buy safe dividend stocks. Otherwise, the dividend payout looks set to go down rather than up.
To help you find compelling dividend ideas I looked for stocks that also have big support from the Street. If a stock has a ‘Strong Buy’ analyst consensus rating, that suggests it has a better risk profile than stocks where the Street outlook is more bearish.
I used TipRank’s powerful stock screener to help pinpoint these 10 worry-free dividend stocks. The screener has nine unique filter options, but I zeroed in on just three.
As you can see below, I looked for: mega-, large- or medium-cap stocks from any sector with a high or very high dividend yield and a Strong Buy analyst consensus rating. This rating is based on analyst stock ratings over the past three months only.
Let’s take a closer look now at these 10 dividend stocks to buy and keep tucked away:
Dividend Stocks to Buy: Broadcom Ltd (AVGO)
Source: Chris Hsia via Flickr
Semiconductor giant Broadcom Limited (NASDAQ:AVGO) has just paid a dividend of $1.75, up from $1.02 the previous quarter. Indeed, with a dividend yield of 2.7%, AVGO has an impressive dividend growth record of eight years and counting.
From a Street perspective, AVGO is one of the best investments out there. The stock has 100% Street support with 26 consecutive buy ratings in just three months. These analysts see AVGO spiking 24% to hit $318 in the next year. Top Oppenheimer analyst Rick Schafer says “We believe AVGO has one of the most strategically and financially attractive business models in semiconductors.”
He calls AVGO his best stock idea for December- January because of its: 1) sustained competitive advantage in high-end filters; 2) a highly diversified, differentiated and “sticky” non-mobile business offering; 3) a manufacturing advantage; 4) substantial EPS and free cash flow accretion from the Broadcom and Brocade acquisitions.
Dividend Stocks to Buy: Medtronic (MDT)
Irish-based Medtronic plc (NYSE:MDT) is among the world’s largest medical equipment development companies. Not only does MDT boast a steadily rising share price (doubling over the past five years), it also qualifies as a Dividend Aristocrat.
The Dividend Aristocrats are a group of 51 companies in the S&P 500 Index, with 25-plus consecutive years of dividend increases. In this case, MDT scores 40 consecutive years of rising dividend payments. Currently, MDT pays a $0.46 quarterly dividend on a 2.3% current yield with a relatively low payout ratio of 49%.
2018 looks set to be an exciting year for MDT. The company plans to launch its own robotic surgical system this year with the help of Mazor Robotics (NASDAQ:MZOR). And in the past month alone, MDT has received two rating upgrades from Merrill Lynch and Argus Research. Five-star Argus Research analyst John Eade explained that the company looks significantly undervalued compared to its peers.
He is impressed by the work MDT is doing to improve operating margins. Meanwhile, his $95 price target suggests 11% upside potential from the current share price.
Dividend Stocks to Buy: Chevron (CVX)
Source: swong95765 via Flickr (Modified)
I just recommended oil and gas giant Chevron Corporation (NYSE:CVX) as a ‘Strong Buy’ stock for 2018. But from a dividend perspective, Chevron is also a top pick that I believe is worth checking out. Indeed, CVX’s dividend yield is a lucrative 3.38%.
This resulted in a $1.08 quarterly payout in December. Note that the yield is far above the basic materials sector average of 2.13%. And most impressively, Chevron has a strong record of steady dividend increases.
According to Yahoo Finance, this Dividend Aristocrat is now looking at 29 years of consecutive dividend growth.
If we turn to the Street we can see that Chevron only has a Moderate Buy analyst consensus rating. But if we look at only the best-performing analysts the consensus actually shifts to Strong Buy. In fact, from top analysts, Chevron has 100% buy ratings. The average price target of these analysts ($140.50) suggests 10% upside from the current share price.
Top Cowen & Co analyst Sam Margolin has just reiterated his buy rating with a bullish $160 price target (25% upside potential). He says: “CVX has been a two-part story: 1) A rapidly balancing FCF profile; 2) pull forward of Permian asset value.
We see progress along those fronts in 2018 accelerating, and it should be relatively easy for investors to keep track of the data outcomes that can drive the stock directionally.”
Dividend Stocks to Buy: McDonald’s (MCD)
Source: Mike Mozart via Flickr
Fast food chain McDonald’s Corporation (NYSE:MCD) makes shareholders happy with a sweet dividend payout. Back in September, the board of directors approved a sizeable payout increase of 7%. This counts as MCD’s 41st straight dividend increase. Following the increase, McDonald’s paid shareholders a $1.01 quarterly dividend in December with a 2.32% yield. As the company website declares: “McDonald’s remains committed to returning excess cash to shareholders through dividends and share repurchases.”
And this isn’t all. The stock also has top marks from the Street. SunTrust Robinson analyst Jake Barlett recently raised his MCD price target from $178 to $205 (18% upside). He calls the upcoming tax reforms a “windfall” for restaurant stocks like McDonald. The reforms will boost the top line on increased consumer spending and bottom-line through tax expense reduction.
Meanwhile, Cowen & Co analyst Andrew Charles calls MCD ‘our top pick for 2018.’ He says: “We are raising our 2018 MCD U.S. same store sales estimate from 4% to 5%, driven by increased confidence for McDonald’s new $1, $2, $3 Dollar Menu launch on Jan 4.”
Dividend Stocks to Buy: Entergy Corp (ETR)
Based in the Deep South, Entergy Corporation’s (NYSE:ETR) slogan is ‘we power life’. In other words, this Fortune 500 company owns and operates power plants with about 30,000 megawatts of electric generating capacity.
For dividend investors ETR is looking pretty rosy right now. The company pays an impressive dividend yield of 4.1% with a high quarterly payout of $0.89.
Also from the Street perspective, we can see that ETR has received two critical stock upgrades. In the past couple of months, both Mizuho Securities and Merrill Lynch have upgraded their hold ratings on the stock to buy.
At the same time, the average analyst price target of $94 indicates big upside potential of 16% from the current share price. Guggenheim’s Shahriar Pourreza even sees the stock hitting $101 (25% upside).
Dividend Stocks to Buy: AbbVie (ABBV)
Shares in the world’s fifth largest biotech AbbVie Inc (NYSE:ABBV) are tearing away right now. Over the last year, shares have soared from $64 to over $100. Dividends are also rising. Back in October, ABBV announced an increase in its quarterly dividend by 11%, to 71 cents.
The move was the latest in a series of dividend hikes since it’s spinoff from Abbott Laboratories (NYSE:ABT) in 2013. Now Abbvie will begin trading ex-dividend on January 11 for the February payout.
Having just received a critical Breakthrough Designation status for its oral eczema drug upadacitinib, the stock has strong backing from the Street. Five-star Jefferies analyst Jeffrey Holford has just raised his price target to $120 (21% upside).
He calls ABBV his Top Pick in U.S. Large Cap Pharma. “Positive revisions tied to tax reform, the Mavyret launch [for hepatitis C] and share repurchases puts ABBV in a strong position to beat & raise through 2018 in our view,” says Holford.
Dividend Stocks to Buy: Crown Castle (CCI)
Source: Sy via Flickr (Modified)
Crown Castle International Corp (NYSE:CCI) is the US’s largest provider of wireless infrastructure. CCI only began paying dividends in 2014 but it is already an interesting dividend pick. It has a current yield of 3.78% and a payout of $1.05. This is up from $0.95 in September.
Importantly, this US-focused stock also boasts a ‘Strong Buy’ Street consensus rating and 9% upside potential. RBC Capital analyst Jonathan Atkin is one of the Top 10 analysts out of over 4,700 ranked by TipRanks. He also has a buy rating and $125 price target on CCI vs the $108 current share price. Atkin sees upside to 2018 numbers and says:
“We believe Crown Castle is well positioned to benefit from the continuing deployment of wireless capacity and coverage in the US and has clear visibility of revenue and EBITDA due to long-term contracts and rent escalators.”
At the same time, the company’s “investment appeal is enhanced by its attractive dividend, which should broaden investor interest amongst income investors.”
Dividend Stocks to Buy: Las Vegas Sands Corp (LVS)
Source: Robert Riley via Flickr
Nevada-based Las Vegas Sands Corp. (NYSE:LVS) is the biggest casino owner in the U.S. Among its U.S. casinos in the United States are two resorts on the Las Vegas Strip: The Venetian (complete with canals and gondolas) and The Palazzo. However, the company also owns a multitude of other properties both in the U.S. and internationally including the Venetian Macao in China and a science museum in Singapore.
The Chairman and CEO behind the brand is self-made multi-billionaire Sheldon Adelson, the biggest and baddest casino owner on the strip. Adelson went from sleeping on the floor of a Bosten tenement to the world’s richest casino owner with an estimated personal wealth of $39 billion.
The company pays a high dividend yield of 4.29%. This translates into a quarterly payout of $0.73. Note that the dividend has more than doubled over the last five years. Meanwhile Barclays analyst Felicia Hendrix boosted her price target to $75 (10% upside) in December. She is very bullish on Macau’s growth prospects.
Dividend Stocks to Buy: Kraft Heinz (KHC)
Source: Mike Mozart via Flickr
The godfather of ketchup, The Kraft Heinz Company (NASDAQ:KHC) has pulled back over the last year from $96 to the current $78 share price. The company is witnessing soft spending by U.S. shoppers along with rapid changes in consumer preferences.
However, KHC is now making steps in the right direction with cost-cutting and portfolio reshaping. The company is showing an increasing focus on natural and organic ingredients and plans to switch to 100% cage-free eggs for its U.S. operations by 2025.
Top RBC Capital analyst David Palmer sums up the position: “we believe 2018 may prove to be a year of accelerating top and bottom line growth with the help of 1) “Big Bet” innovations and repatriation of certain Kraft brands and 2) the full-year benefits of 2H17 supply-chain investments.” He says he also continues to see potential from large-scale M&A.
In terms of dividends, his ‘Strong Buy’ stock currently pays a relatively high 3.19% yield. This breaks down into a quarterly payment of $0.625. We can track payout increases back over the last four years. Most recently, KHC upped its dividend from $0.60 in August.
Dividend Stocks to Buy: NextEra Energy Inc (NEE)
‘Strong Buy’ stock NextEra Energy, Inc. (NYSE:NEE) is a leading clean energy company with over 46,000 megawatts of generating capacity. This breaks down into four different type of energy generation- wind, solar, fossil fuel and nuclear energy. Back on Dec. 15, NEE paid a dividend of $0.983 at a yield of just over 2.52%. Note that the company has recorded eight consecutive years of dividend growth.
Argue Research analyst Jacob Kilstein picks up on this when ramps up his price target from $165 to $173 (11% upside). The company’s premium valuation versus peers is justified by its consistent EPS and dividend growth, says Kilstein.
And looking to the future, Kilstein stays confident that the company’s ongoing growth opportunities will continue to support dividend and earnings growth for some time to come. He reiterated his buy rating on Dec. 5.
TipRanks offers investors the latest insight into eight different sectors by tracking the activity of 4,700 analysts, 5,000 financial bloggers and even 37,000 corporate insiders. As of this writing, Harriet Lefton did not hold a position in any of the aforementioned securities.