Uncertainty over the economy and tariff wars have been fueling volatility in the stock market, but dividend-paying stocks can offer investors some stability.
Investors looking for stable income in this shaky backdrop can consider adding stocks of dividend-paying companies to their portfolios. To that end, the recommendations of top Wall Street analysts can inform investors who are on the hunt for the right names.
Here are three dividend-paying stocks, highlighted by Wall Street’s top pros on TipRanks, a platform that ranks analysts based on their past performance.
Vitesse Energy
This week’s first dividend pick is Vitesse Energy
(VTS), a unique energy company that owns financial interests, mainly as a non-operator, in oil and gas wells drilled by leading U.S. operators. Earlier this month, Vitesse completed the acquisition of Lucero Energy. The company expects this deal to increase dividends and provide additional liquidity to bolster its ability to make accretive acquisitions.
Recently, Vitesse announced its fourth-quarter results and declared a quarterly dividend of $0.5625 per share, payable on March 31. This payment marks a 7% rise from the prior quarter. VTS stock offers a dividend yield of 9.3%.
Following the Q4 print, Jefferies analyst Lloyd Byrne reiterated a buy rating on VTS stock with a price target of $33. The analyst noted that the Q4 EBITDA (earnings before interest, tax, depreciation, and amortization) modestly lagged the consensus estimate due to marginally lower-than-expected production and the one-time costs related to the Lucero acquisition.
Byrne noted the planned increase in Vitesse’s dividend following the completion of the Lucero acquisition. The analyst stated that increasing the dividend is consistent with VTS’ strategy of raising its payout as the expected operating cash flow grows. He added that management aims to keep the dividend coverage ratio at about 1.0x.
The analyst highlighted that the Lucero deal adds to the company’s operated production in the Bakken and nearly 25 net locations, which Vitesse believes equates to about 10 years of inventory life. Byrne views the Lucero deal positively, as it is accretive to Vitesse’s earnings, dividend, free cash flow, and net asset value.
“While the deal is a departure from VTS’s non-op strategy, adding an operated leg gives VTS incremental control over its capital and potential additional deal flow,” said Byrne.
Byrne ranks No. 166 among more than 9,400 analysts tracked by TipRanks. His ratings have been profitable 54% of the time, delivering an average return of 20.1%. See Vitesse Energy Stock Charts on TipRanks.
Viper Energy
We move to Viper Energy
(VNOM), an oil and gas company that is a subsidiary of Diamondback Energy
(FANG). Viper was formed by Diamondback to own, acquire, and exploit oil and natural gas properties in North America. It is focused on owning and acquiring mineral and royalty interests in oil-weighted basins, mainly the Permian Basin.
The company announced a base cash dividend of 30 cents per share and a variable cash dividend of 35 cents per share for the fourth quarter of 2024. The total Q4 2024 capital return of 65 cents per share represents 75% of the cash available for distribution.
Recently, JPMorgan analyst Arun Jayaram reiterated a buy rating on VNOM stock but lowered the price target to $51 from $56 as part of an update to his firm’s exploration and production models. The update reflected natural gas supply-demand analysis, stronger than expected LNG (liquified natural gas) demand-pull and the possibility of further decline in oil prices. The decline would be due to the combination of record U.S. oil supply, the return of OPEC+ barrels in April and global trade risk amid tariffs.
Explaining his bullish stance on VNOM stock, Jayaram said that mineral companies like Viper own the perpetual royalty interests under oil and gas leasehold, which gives them exposure to growth with no capital or operating expenses.
The analyst highlighted Viper’s policy of returning about 75% of all distributable cash flow to shareholders through base and variable dividends and share buybacks. Jayaram thinks that Viper is unique due to its relationship with Diamondback Energy. Notably, Diamondback operates a major portion of Viper’s acreage, which gives visibility and reduces a key uncertainty that is usually associated with companies in the minerals space.
“In Viper’s case, between EBITDA growth and FCF yield, we see an attractive total return proposition,” the analyst said.
Jayaram ranks No. 677 among more than 9,400 analysts tracked by TipRanks. His ratings have been successful 53% of the time, delivering an average return of 8.3%. See Viper Energy Stock Buybacks on TipRanks.
ConocoPhillips
Jayaram is also bullish on ConocoPhillips
(COP) and reaffirmed a buy rating on the stock but lowered the price target to $115 from $127 as part of his update to his firm’s exploration and production models. As mentioned above, the analyst is concerned about the possibility of a further decline in oil prices. ConocoPhillips announced a dividend of 78 cents a share for Q1 2025. COP stock offers a dividend yield of 3.1%.
The analyst said that since ConocoPhillips’ 2016 strategy reset, the company has been one of the best exploration and production players. Jayaram noted multiple counter-cyclical transactions executed by COP that have lowered its cost of supply and significantly enhanced the durability of the company’s “Lower 48” inventory, bolstering its balance sheet and portfolio optionality to LNG.
Jayaram added that on a normalized basis, ConocoPhillips’ corporate break-even would be at the low-end of the peer group, given that it has much lower sustaining capital requirements than its peers. However, the combination of the company’s long-cycle investments like Willow and Port Arthur, as well as the Marathon Oil merger, have modestly increased the oil beta of COP stock.
He expects ConocoPhillips to be one the few exploration and production companies in JPMorgan’s coverage that could increase their cash return in 2025, including stock buybacks of $6 billion.
“We view COP as a core E&P holding given its portfolio strength, inventory durability, and shareholder friendly cash return framework,” said Jayaram. See ConocoPhillips Hedge Fund Trading Activity on TipRanks.
