The Federal Reserve's recent meeting suggested a possible interest rate increase, which could impact income-focused investors. In this context, dividend-paying stocks are gaining attention for their potential to deliver solid returns. Analysts from Wall Street have identified three stocks worth considering.
Kinetik Holdings, a midstream company, offers a quarterly dividend of 81 cents per share, translating to a 7% yield. RBC Capital's Elvira Scotto has a buy rating on Kinetik, raising her price target to $53, citing growth prospects from the KL2 project and sour gas opportunities in New Mexico.
She believes Kinetik is well-positioned to capitalize on these developments, especially given its infrastructure designed for sour gas handling. SLB, formerly Schlumberger, is another pick, with a quarterly dividend of nearly 30 cents per share and a yield of 2.5%.
Goldman Sachs analyst Neil Mehta maintains a buy rating with a price target of $63, highlighting SLB's strong position in the oilfield services market and expected growth from increased drilling activity globally. Lastly, IBM, focusing on quantum computing and AI, offers a quarterly dividend of $1.69 per share, yielding 2.7%.
Bank of America's Wamsi Mohan reaffirmed a buy rating and raised the price target to $315, noting IBM's structural advantages and growth driven by AI demand across its technology offerings. These insights suggest that these dividend stocks could provide investors with both income and growth opportunities in a potentially shifting economic landscape