There Are 3 Dividend Stocks That Wall Street Analysts Recommend for the Long Run

In the wake of a challenging year for several dividend stocks attributed to elevated interest rates, a potential resurgence is anticipated as the Federal Reserve signals rate cuts in 2024. In the context of a long-term investment strategy, three dividend stocks have garnered attention from top experts on TipRanks, a platform that evaluates analysts based on their historical performance.

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OneMain Holdings, a financial services company catering to non-prime customers seeking credit access, is the first pick. Recently paying a quarterly dividend of $1 per share, the stock boasts an appealing yield of approximately 9%. RBC Capital analyst Kenneth Lee, reaffirming a buy rating and setting a $50 price target following the company's Investor Day, expressed increased confidence in OneMain Holdings. Notably, the company's foray into auto financing has expanded its total addressable market to about $1.3 trillion, and its underwriting models, leveraging machine learning and alternative data, exhibit significant predictive power.

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Moving on to CVS Health, the retail pharmacy chain announced a 10% increase in its quarterly dividend to 66.5 cents. With a forward dividend yield of around 3.5%, Mizuho analyst Ann Hynes remains bullish on CVS after its Investor Day. Despite the company's adjusted EPS growth floor falling below her forecast, Hynes sees potential upside through market share gains and the success of new strategies. CVS's commitment to a balanced capital deployment strategy, including growing dividends, contributes to Hynes's positive outlook.

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Devon Energy, an oil and gas producer, declared a fixed plus variable dividend of 77 cents per share, marking a 57% increase from the second quarter of 2023. With a dividend yield of 6.5%, the company aims to allocate 70% of its 2024 free cash flow to cash returns, emphasizing share repurchases and variable dividends. Goldman Sachs analysts, led by Neil Mehta, noted Devon's acknowledgment of 2023 challenges but anticipate a recovery in capital efficiency in 2024, particularly through increased allocation to the Delaware basin.

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These dividend stocks offer investors an opportunity for potential gains, aligning with a positive outlook driven by factors such as the Federal Reserve's signaled rate cuts and the strategic initiatives of the respective companies. Analysts' endorsements, backed by their historical performance on TipRanks, add credibility to these investment opportunities. As investors navigate the market landscape, these dividend stocks stand out as noteworthy considerations for those seeking stability and income potential in their portfolios.