Investors who are looking to add dividend-paying stocks to their portfolios are always on the hunt for companies with a strong track record of steady payments and solid financials. One such company that stands out is Darden Restaurants (DRI), which operates several well-known brands in the full-service dining sector, including Olive Garden, LongHorn Steakhouse, and Yard House.
In the fourth quarter of fiscal 2024, Darden reported mixed results, with earnings surpassing analysts’ expectations but sales falling slightly short of the consensus due to increased competition. Despite this, the company issued $628 million in dividends and allocated $454 million for share repurchases in the same year. Additionally, Darden announced a dividend increase of nearly 7%, bringing the quarterly dividend to $1.40 per share, resulting in a dividend yield of 3.5%.
BTIG analyst Peter Saleh reiterated a buy rating on DRI stock with a price target of $175, citing the company’s projected double-digit total shareholder return and strong historical performance compared to its industry peers. Saleh’s bullish outlook is based on factors such as anticipated price increases, marketing initiatives, and inflation trends that are projected to support Darden’s targeted return metrics.
International Seaways (INSW)
Another dividend stock worth considering is International Seaways (INSW), a tanker company providing energy transportation services for crude oil and petroleum products. INSW recently paid a combined dividend of $1.75 per share, representing 60% of its first-quarter adjusted net income.
Stifel analyst Benjamin Nolan reaffirmed a buy rating on INSW and raised the price target to $68 following discussions with the company’s management. Nolan’s optimism stems from the strong outlook for the tanker market due to increasing global oil consumption, limited new ship supply, and geopolitical factors leading to longer voyage lengths. The analyst predicts higher cash flows for INSW, supported by a favorable market environment, and expects the company to continue offering substantial supplemental dividends based on excess cash flow estimates.
Nolan’s bullish stance on INSW is reinforced by his track record as an analyst, ranking No. 68 among over 8,900 analysts tracked by TipRanks, with successful ratings delivering an average return of 19.5%.
Citigroup (C)
Lastly, Citigroup (C) is a banking giant with a quarterly dividend of 53 cents per share and a yield of 3.3%. Following the company’s Services Investor Day on June 18, Goldman Sachs analyst Richard Ramsden reiterated a buy rating on Citi stock and raised his price target to $72, reflecting increased earnings per share estimates for the coming years.
Ramsden’s positive outlook on Citigroup is fueled by the bank’s strategic transformation efforts, which are showing progress in risk management and data quality. Specifically, the Services business is expected to play a crucial role in driving revenue growth for Citigroup, with strategic priorities aimed at maximizing market share across various segments.
The analyst’s confidence in Citigroup’s future prospects is supported by the bank’s global presence, long-term client relationships, and ongoing investments in technology and innovation, all of which are expected to drive market share gains in the coming years.
These three dividend stocks present attractive investment opportunities for investors seeking to strengthen their portfolios with companies that offer steady payouts and growth potential. Each of these companies has been endorsed by Wall Street analysts with solid track records, making them compelling options for income-seeking investors.