SPECIAL REPORT The Top 7 Stocks for 2024

3 Strong-Buy Dividend Stocks That Analysts Love

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  • Looking at analyst ratings can help you find strong buy dividend stocks. 
  • Occidental Petroleum (OXY): Warren Buffett continues to buy the oil giant, and it’s not just about the dividend. 
  • Johnson & Johnson (JNJ): It’s been a noisy year, but it’s time for investors to unlock the value in this dividend king. 
  • Delta Airlines (DAL): The dividend is back, and that’s only one reason analysts are climbing on board.  
strong buy dividend stocks - 3 Strong-Buy Dividend Stocks That Analysts Love

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For much of 2022 and 2023, investors could take shelter in dividend stocks. They were, as the saying goes, the best houses in a bad neighborhood (the equity markets). It’s not that the analysts loved these stocks, but they hated them less. That sentiment is changing which makes it a good time to look for strong buy dividend stocks.  

What are analysts seeing? For starters, they’re noticing that interest rates may have peaked. That doesn’t mean they’ll come down anytime soon, but the Federal Reserve may be done raising them. Adding fuel to that argument is that the price of oil has come down and with it, the pace of inflation.  

That doesn’t mean it’s time to sound the all clear for stocks. There are any number of macroeconomic and geopolitical concerns that could derail investors. However, it’s important to invest in the market that is – and right now that means looking for strong buy dividend stocks. You’ll get stocks with potentially good upside and a dividend to protect you if that growth takes longer than you expect.  

Occidental Petroleum (OXY)

Occidental Petroleum (OXY) Company logo seen displayed on smart phone
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Energy stocks are typically strong buy dividend stocks in good or bad times. The same playbook is in play right now. That’s a reason to consider Occidental Petroleum (NYSE:OXY). The company has been making headlines in 2023 because Warren Buffett has added to Berkshire Hathaway’s (NYSE:BRK.A, NYSE:BRK.B) on three separate occasions and now owns more than 25% of the oil giant.  

It’s likely that Buffett is seeing many of the things that other investors are seeing. That is the company is generating a lot of cash and it’s putting that cash to work to improve the value of the company and its stock.

Investors should note that as analysts bid up OXY stock, Buffett has been raising his buy point. Although crude oil prices have dipped below $80, there are many reasons to believe that the long-term outlook for oil prices is higher. But even if prices remain rangebound, Occidental is showing that it knows how to generate cash.  

The company is rapidly increasing its dividend. The dividend payout has grown from one cent a share at the end of 2021 to 18 cents per share today. That’s likely headed higher early next year.  

Johnson & Johnson (JNJ) 

Negative Press Presents a Buying Opportunity with JNJ Stock
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Johnson & Johnson (NYSE:JNJ) stock is down 14% in the last three months. This comes despite the company reaching a settlement for its long-running talc lawsuit. Normally, the known would be better than the unknown, but in a risk-off market, many investors don’t view JNJ as the safe stock it once was.

Shares were also under pressure after JNJ spun off its consumer health brands business into the independent company, Kenvue (NYSE:KVUE).  

However, as the dust settles, investors should like what they see. The company just had a double beat in its October 2023 earnings report. And from a technical perspective, you can make a case that the stock is oversold. True, the stock price has only grown 4.92% in the last five years. But with a projection for 7% earnings growth in the next year, it may be time to consider taking a position. 

Of the 24 analysts offering a rating for JNJ stock in the last three months, only seven give the stock a Strong Buy. However, each of the 18 analysts that have issued a price target have a target above the stock’s current price of $149.19. And the consensus target is 23.7% higher than the current price of $149.19. 

Delta Airlines (DAL)

Delta (DAL) airlines plane mid take-off
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Just a few short months ago, Delta Airlines (NYSE:DAL) wouldn’t have been on a list of strong buy dividend stocks. Or, for that matter, a list of dividend stocks in general. The airline suspended its dividend in 2020 at the onset of the Covid-19 pandemic. This was a completely warranted response to an unprecedented disruption to the business model. 

But the company’s cost-cutting measures got the airline through, and Delta resumed its dividend in June 2023. That 10-cent per share dividend is only 25% of its pre-pandemic dividend, but the airline is committed to maintaining the dividend.  

In its October 2023 earnings report Delta posted a double beat that shows consumers are still willing, and able, for now, to pay for experiences. This is generating strong free cash flow that the company is using to pay down the debt it took on during the pandemic. As the debt balance goes down, and the cash balance goes up, investors should be expecting the dividend to increase as well.

Out of the 23 analysts that have issued a stock rating on DAL stock in the last three months, 19 give the stock a “Strong Buy” rating. The consensus price target of $52.30 is 46.7% higher than the stock’s current price of $35.76.  

On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. 

Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.


Article printed from InvestorPlace Media, https://investorplace.com/2023/11/3-strong-buy-dividend-stocks-that-analysts-love/.

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