Top Wall Street analysts like these dividend-paying energy stocks

Fears of a possible recession and nervousness over tariff coverage are weighing on the markets, however dividend shares may help regular buyers’ portfolios.

Prime Wall Road analysts assist determine corporations that may face up to short-term challenges and generate stable money flows, permitting them to constantly pay stable dividends.

Listed here are three dividend-paying shares, highlighted by Wall Road’s prime execs on TipRanks, a platform that ranks analysts based mostly on their previous efficiency.

Midstream vitality firm Power Switch (ET) is that this week’s first dividend decide. The corporate has a diversified portfolio of vitality belongings within the U.S., with greater than 130,000 miles of pipeline and associated vitality infrastructure.

In February, ET paid a quarterly money distribution of $0.3250 per widespread unit, reflecting a 3.2% year-over-year enhance. The inventory provides a dividend yield of seven.5%.

Power Switch is scheduled to announce its first-quarter outcomes on Might 6. In her Q1 preview on the U.S. midstream sector, RBC Capital analyst Elvira Scotto named Power Switch as one of many corporations she favors on this house. The analyst contends that the latest pullback within the shares in RBC’s midstream protection universe appears “overdone given the extremely contracted and fee-based nature of midstream companies.”

Scotto thinks that ET’s commentary about advantages from Waha worth spreads (the worth distinction between pure fuel traded on the Waha Hub within the Permian Basin and the benchmark Henry Hub worth) might be one of many key drivers. She additionally expects ET inventory to realize from any updates on potential knowledge heart/synthetic intelligence-driven initiatives. The analyst added that administration’s feedback about export markets, primarily China, because of the commerce warfare, can even impression investor sentiment.

The analyst is bullish on Power Switch as a consequence of its diversified money circulate streams throughout hydrocarbons and basins, together with a major quantity of fee-based money circulate. Scotto expects ET’s money circulate development, coupled with a stable stability sheet, to spice up the money returns to unit holders. She thinks that ET inventory has a sexy valuation with restricted draw back. Total, Scotto reaffirmed a purchase ranking on ET inventory however barely lowered the worth goal to $22 from $23 as a consequence of market uncertainty.

Scotto ranks No. 24 amongst greater than 9,400 analysts tracked by TipRanks. Her rankings have been profitable 67% of the time, delivering a median return of 18.1%. See Power Switch Possession Construction on TipRanks.

One other midstream vitality participant that Scotto is bullish on is The Williams Firms (WMB). The corporate is ready to announce its outcomes for the primary quarter of 2025 on Might 5. Not too long ago, WMB raised its dividend by 5.3% to $2.00 on an annualized foundation for 2025. WMB provides a dividend yield of three.4%.

Forward of the Q1 outcomes, Scotto listed a number of potential key drivers for WMB inventory, together with long-term AI/knowledge heart development alternatives, dry fuel basin exercise, advertising section outcomes and the timing of development initiatives coming on-line.

“We expect buyers favor WMB’s pure fuel centered operations at present because the impression to pure fuel demand is decrease vs crude oil in a downturn given the underlying demand assist from growing LNG exports and AI/datacenters,” stated Scotto.

Scotto reaffirmed a purchase ranking on WMB inventory with a worth goal of $63. The analyst expects continued robust volumes throughout Williams’ segments, although some quantity headwinds could persist within the Northeast section. Scotto expects a stable quarter for WMB’s Sequent enterprise as a consequence of weather-led storage alternatives.

Total, Scotto is optimistic about WMB executing on its backlog of development initiatives and bolstering its stability sheet. With a long-term horizon, the analyst expects Williams to stay comfortably inside investment-grade credit score metrics by way of her forecast interval and maintain its dividend intact. See Williams Technical Evaluation on TipRanks.

Diamondback Power (FANG) is concentrated on the onshore oil and pure fuel reserves within the Permian Basin. In February, the corporate introduced an 11% hike in its annual base dividend to $4 per share. FANG provides a dividend yield of 4.5%.

Forward of the corporate’s first-quarter outcomes scheduled to be introduced in early Might, JPMorgan analyst Arun Jayaram reiterated a purchase ranking on FANG inventory and barely decreased the worth goal to $166 from $167. The analyst expects the corporate’s Q1 2025 outcomes to be comparatively in keeping with the Road’s estimates. Jayaram expects FANG to report Q1 money circulate per share (CFPS) of $8.12 in comparison with the Road’s estimates of $8.09.

Regardless of the volatility in commodity costs, Jayaram would not count on any adjustments to FANG’s upkeep capital plan, at the very least within the close to time period, with operations persevering with to be on observe following the Double Eagle acquisition. The analyst additionally famous stable nicely productiveness traits from Diamondback’s initiatives that turned-in-line in 2024, which ought to present extra capital effectivity tailwinds.

Jayaram expects FANG to generate free money circulate (FCF) of about $1.4 billion, with money returns comprising 90 cents per share in quarterly dividends and $437 million of share buybacks.

“FANG is a pacesetter in capital effectivity among the many E&Ps [exploration and production companies] and has one of many lowest FCF break-evens throughout the group,” the analyst stated.

Jayaram ranks No. 943 amongst greater than 9,400 analysts tracked by TipRanks. His rankings have been profitable 49% of the time, delivering a median return of 6.2%. See Diamondback Power Insider Buying and selling on TipRanks.