Wall Street’s top analysts are confident about…

In turbulent markets, investors can turn to dividend-paying stocks that offer income and can help cushion the portfolio in difficult times.

Given the vast universe of dividend-paying companies, picking the right stocks can be a daunting task. For this purpose, investors can track the recommendations of Wall Street experts, who conduct a comprehensive analysis of the company’s earnings growth potential and dividend history.

Here are three interesting dividend stocks, according to Wall Street’s top pros at TipRanks, a platform that ranks analysts based on past performance.

This week’s first dividend pick is the tech giant IBM (IBM), which announced mixed first-quarter results. The company’s earnings beat expectations while revenue missed estimates amid an uncertain macro backdrop. Also, IBM announced the $6.4 billion acquisition of cloud software maker HashiCorp.

IBM paid a $1.5 billion dividend in the first quarter. The company generated free cash flow of $1.9 billion in Q1 2024 and expects free cash flow of about $12 billion in the full year. IBM’s yield is about 4%.

Recently, Evercore analyst Amit Daryanani reiterated a buy rating on IBM stock with a price target of $215. Analysts are positive about the company’s growth levers and expect to benefit from several tailwinds, including generative artificial intelligence and accelerating consulting revenue.

“IBM sounds confident in its ability to see accelerated profits in H2 on the consulting side from 2% growth in Q1,” Daryanani said.

While the consulting business in Q1 2024 was affected by macro challenges in terms of discretionary spending, the analyst noted that there are many catalysts that indicate an increase in growth going forward. These catalysts include generative AI ramps, backlog conversions and M&A contributions in the second half of 2024 from previously announced deals. Daryanani is also optimistic about sustained growth in the mainframe business.

Daryanani is ranked number 243 among more than 8,800 analysts tracked by TipRanks. His ratings have been favorable 59% of the time, yielding an average of 13.2%. (See IBM Stock Buybacks on TipRanks)

We went to the toy maker Hasbro (already). In April, the company reported better-than-expected first-quarter earnings, thanks to its turnaround efforts. Hasbro paid a dividend of $97.2 million in Q1 2024. HAS has a dividend yield of 4.7%.

After a meeting with Hasbro management at JPMorgan’s 52nd Annual TMC Conference, JPM analyst Christopher Horvers upgraded HAS shares to buy from hold while increasing his price target to $74 from $61.

The analyst said that the forecast for Hasbro was higher than the consensus forecast, because the Street underestimated the company’s cost efficiency efforts and the prospects of digital games, both of which should be felt in the second half of 2024 and the first half of 2025.

Despite the shortened holiday season, Horvers is optimistic about the industry experiencing better growth in 2024 due to the recovery of low-cost product categories and short replacement cycles.

“HAS is specifically positioned better in 2H24 due to Transformers’ shift to 3Q from 2Q and early benefit from better merchandising (new and processes under new management),” the analyst said.

Horvers ranks No. 769 among more than 8,800 analysts tracked by TipRanks. His ratings have been successful 60% of the time, yielding an average of 7.2%. (See Hasbro’s Technical Analysis at TipRanks)

Finally, let’s look at big box retailers Target (TGT). In the first quarter of 2024, Target paid out $508 million in dividends to shareholders. TGT’s dividend yield is 2.8%.

Commenting on Target’s first quarter results, Baird analyst Peter Benedict noted that the company slightly missed analysts’ earnings per share, as higher operating expenses offset the increase in gross margin.

Benedict thinks the post-earnings selloff in TGT stock is due to lower-than-expected earnings and the price cuts announced by the company seem overdone. He emphasized that additional investment in value and affordability through lower prices is definitely part of Target’s strategy for fiscal 2024. The analyst added that the company’s inventory remains healthy.

In particular, Benedict thinks that management’s goal of restoring positive comparable sales growth appears achievable in the fiscal second quarter as it is easier compared to the prior-year period.

Analysts also think the company “continues to plan carefully given the value-conscious spending environment.”

Overall, Benedict thinks that the risk/reward profile of TGT stock looks compelling. The analyst reiterated a buy rating on Target with a price target of $190.

Benedict is ranked 77th among more than 8,800 analysts tracked by TipRanks. His ratings have been favorable 68% of the time, yielding an average of 15.1%. (See Target Insider Trading Activity on TipRanks)