When considering dividend stocks, one of the top picks provided by Wall Street’s top pros on TipRanks is EPR Properties (EPR). This real estate investment trust specializes in experiential properties such as movie theaters, amusement parks, eat-and-play centers, and ski resorts. EPR offers a generous dividend yield of 7.3%, making it an attractive option for income-seeking investors.
RBC Capital analyst Michael Carroll recently upgraded his rating for EPR to buy from hold, with a price target of $50. Carroll expressed confidence in the company’s ability to navigate challenging operating conditions, such as the impacts of the Covid-19 pandemic and actors/writers strikes. He believes that EPR is well-positioned to deliver positive results as these challenges begin to fade.
Carroll’s analysis suggests that the theatrical box office is expected to rebound in the second half of 2024 and in 2025, which will drive higher percentage rents and strengthen the tenant base for EPR. Additionally, he noted that management is taking steps to reduce the company’s exposure to theaters over time, addressing concerns about concentration risk.
Furthermore, Carroll highlighted that AMC, one of EPR’s key tenants, is taking proactive measures such as capital raises and debt refinancing to address financial challenges. Overall, EPR’s high dividend yield is supported by its nearly 70% adjusted funds from operations payout ratio and a solid balance sheet with a 5.2-times net debt to earnings before interest, taxes, depreciation, and amortization ratio.
Energy Transfer: Leveraging Growth Opportunities in Energy
Another dividend stock worth considering is Energy Transfer (ET), a limited partnership in the midstream energy sector. With a dividend yield of 8%, Energy Transfer distributed 32 cents per unit in August, reflecting year-over-year growth of 3.2%. This robust dividend yield makes ET an attractive option for income-focused investors.
Stifel analyst Selman Akyol provided a positive outlook for ET, citing better-than-expected EBITDA in the second quarter and highlighting growth prospects in the Permian to Gulf Coast value chain. Akyol emphasized the positive sentiment around natural gas, which is expected to play a significant role in meeting the energy needs of artificial intelligence data centers.
Akyol also pointed out that Energy Transfer is well-positioned to capitalize on increased demand from utilities in states like Texas and Florida. These regions offer promising growth opportunities, driven by the expansion of data centers and population growth. With a favorable positioning and a solid footprint, Energy Transfer is poised to benefit from ongoing trends in the energy sector.
Walmart: A Retail Giant with Strong Dividend Growth
One of the most recognizable names in the retail sector, Walmart (WMT) has been a consistent performer in terms of dividend growth and shareholder returns. Following a robust performance in the second quarter of fiscal 2025, Walmart raised its full-year outlook and continued to reward shareholders with dividends and share repurchases.
Analyst Peter Benedict from Baird reiterated a buy rating on Walmart, with a price target of $82. Benedict praised the company’s ability to gain market share amidst a challenging macro environment, attributing its success to a focus on value and convenience. He highlighted Walmart’s digital growth and increased earnings from higher margin advertising and membership income streams.
Benedict also noted the improvements in Walmart’s return on investment, driven by investments in automation and generative AI. With a track record of consistent dividend hikes and strong financial performance, Walmart remains a solid option for investors seeking stability and growth potential in the current market.
When evaluating dividend stocks in the current market, it is essential to consider factors such as industry trends, financial performance, and growth prospects. By focusing on companies with strong fundamentals and attractive dividend yields, investors can build a diversified portfolio that generates sustainable income and long-term value.