When it comes to investing in dividend-paying stocks, it is crucial for investors to choose companies that not only offer attractive dividend yields but also have the potential for long-term growth. One such company that fits the bill is Kimberly-Clark (KMB), a consumer products giant that is known for brands like Huggies and Kleenex. In the first quarter of 2024, Kimberly-Clark returned $452 million to shareholders through dividends and share repurchases. With a quarterly dividend of $1.22 per share, KMB offers a dividend yield of 3.5%. Wall Street analysts, including RBC Capital’s Nik Modi, have recognized the company’s growth potential. Modi recently upgraded his rating for KMB stock to buy and increased the price target to $165, citing the company’s shift from a cost-focused to a growth-oriented enterprise under the leadership of CEO Mike Hsu. Kimberly-Clark’s strategic organizational changes have led to lower product costs and improved speed to market, making it a top pick for dividend investors.
Another dividend stock worth considering is Chord Energy (CHRD), an oil and gas operator in the Williston Basin. The company recently completed its acquisition of Enerplus, a move that is expected to strengthen its position in the basin and drive shareholder returns. Mizuho analyst William Janela reiterated a buy rating on CHRD stock with a price target of $214, highlighting the increased estimate for annualized deal synergies. Janela believes that the combined company’s operational scale will lead to above-average cash returns and attractive valuation relative to peers. With a strong focus on well productivity and financial leverage, Chord Energy presents an enticing opportunity for dividend investors looking to capitalize on the energy sector’s growth potential.
In the technology sector, dividend-paying stocks like Cisco Systems (CSCO) offer investors the opportunity to benefit from both dividend income and capital appreciation. Cisco paid $2.9 billion to shareholders in the third quarter of fiscal 2024, including dividends and share repurchases. With a quarterly dividend of 40 cents per share, CSCO provides a dividend yield of 3.5%. Jefferies analyst George Notter’s positive outlook on Cisco’s prospects further solidifies the company’s position as a top pick for dividend investors. Notter reiterated a buy rating on Cisco stock following a recent investor and analyst day, where he gained better clarity on the company’s strategy with regard to Splunk. Cisco’s long-term growth targets, including revenue and earnings per share growth in fiscal 2026-2027, make it an attractive choice for dividend investors seeking exposure to the tech sector.
Investors looking to build a diversified portfolio with strong dividend stocks can consider companies like Kimberly-Clark, Chord Energy, and Cisco Systems. Each of these companies offers a unique opportunity for investors to benefit from dividend income and long-term growth potential. By carefully selecting dividend stocks with the guidance of top Wall Street analysts, investors can create a portfolio that is resilient to market volatility and positioned for success in the long run.