Investor sentiment is currently under pressure due to fears surrounding a potential government shutdown, a slowing labor market, and high stock valuations. Amid this uncertainty, analysts from Wall Street are recommending dividend stocks as a means for investors to secure stable returns. This article highlights three dividend-paying companies endorsed by top analysts, based on data from TipRanks, which ranks analysts according to their historical performance.
Brookfield Infrastructure Partners
First on the list is Brookfield Infrastructure Partners (BIP), a global infrastructure firm managing a diverse portfolio in utilities, transport, midstream, and data sectors. On September 29, 2023, BIP announced a quarterly dividend of **43 cents per unit**, marking a **6% increase** from the previous year. With an annualized dividend of **$1.72 per unit**, the stock offers a dividend yield of **5.2%**.
Following a recent Investor Day, BMO Capital analyst Devin Dodge maintained a buy rating on Brookfield Infrastructure stock, projecting a price target of **$42**. He noted that management’s presentations highlighted strong organic growth prospects across BIP’s portfolio, which he anticipates will become increasingly evident in the coming quarters. Dodge emphasized the expansion of high-growth platforms within the company and pointed out significant investment opportunities, particularly in digital infrastructure.
As hyperscalers are expected to ramp up capital spending by **50%** this year, BIP’s data center platforms could see notable growth. Dodge also mentioned that BIP’s funds from operations per unit (FFO/unit) growth may be nearing a critical turning point. Historically, BIP’s FFO/unit has grown at a compound annual rate of approximately **10%** over the past five years, despite facing foreign exchange challenges and high interest rates. He anticipates these pressures will ease soon, potentially driving further FFO growth.
“With FFO/unit growth shifting higher, we believe there are positive implications for distribution growth and valuation,” Dodge stated. While TipRanks’ AI Analyst maintains a “neutral” rating on BIP with a price target of **$33**, Dodge ranks **377th** among over **10,000** analysts tracked by the platform, achieving a success rate of **73%** and an average return of **13.2%**.
Ares Capital
Next is Ares Capital (ARCC), a specialty finance company providing direct loans and investments to private middle-market firms. Ares currently pays a quarterly dividend of **48 cents per share**, which translates to an annualized dividend of **$1.92 per share** and a yield of **9.4%**.
In a recent update on business development companies, RBC Capital analyst Kenneth Lee reiterated a buy rating on Ares Capital, setting a price target of **$24**. Notably, TipRanks’ AI Analyst assigns an “outperform” rating to ARCC with a price target of **$25**. Lee expressed a preference for ARCC, along with Blackstone Secured Lending Fund (BXSL) and Sixth Street Specialty Lending (TSLX) stocks, highlighting ARCC’s strong risk management throughout various market cycles.
Lee regards Ares Capital as a market-leading business development company (BDC) with significant scale, benefiting from access to the Ares global credit platform—a key competitive advantage. He remains optimistic about Ares Capital’s potential to generate returns exceeding peer averages. Lee also underscored that ARCC’s dividends are supported by core earnings per share and potential net realized gains. Ranking **59th** among analysts tracked by TipRanks, Lee has a success rate of **72%**, yielding an average return of **16.7%**.
ONE Gas
Lastly, ONE Gas (OGS) is a fully regulated natural gas utility serving over **2.3 million** customers across Kansas, Oklahoma, and Texas. The company pays a quarterly dividend of **67 cents per share**, culminating in an annualized dividend of **$2.68 per share** and a yield of **3.3%**.
Mizuho analyst Gabe Moreen recently upgraded OGS from hold to buy, raising his price target from **$77** to **$86**. His analysis cites benefits from Texas HB 4384 legislation, which allows the recovery of certain costs related to gas utility infrastructure. Moreen anticipates that this legislation could yield a full-year benefit of approximately **18 cents** in incremental earnings per share by **fiscal 2026**, with the potential for ongoing growth aligned with ONE Gas’ capital expenditures in Texas, which constitutes roughly **32%** of its rate base.
“We believe this will place a floor under OGS’ growth outlook at the higher end of its **4-6%** range,” Moreen noted. He expects interest rate cuts by the Federal Reserve to alleviate some of the financial pressures that have led to guidance revisions in 2023 and 2024. Moreen highlighted growth opportunities stemming from rising natural gas demand among data centers and advanced manufacturers, making OGS an appealing investment at its current valuation. He anticipates a rebound to historical premium valuation levels, which the stock maintained prior to the recent guidance adjustments.
Ranking **142nd** among analysts tracked by TipRanks, Moreen has achieved a success rate of **75%**, with an average return of **13.3%**.
In an environment marked by economic uncertainty, these three dividend-paying companies present viable options for investors seeking stable returns, supported by strong fundamentals and positive analyst outlooks.