Dividend stocks are usually thought of as a way to provide stable, passive returns. However, the magnitude of their importance is often overlooked. Since 1926, dividends have accounted for roughly 32% of the total return of the S&P 500. Failing to capitalize on these regular payments is a surefire way to ensure substandard gains.
There is always a delicate balance that needs to be found — capital appreciation is one of the most reliable ways to determine whether or not a business will be able to maintain or even raise its dividend payments.
The inverse also holds true — companies that have maintained stable dividends, like those found in the S&P 500 Dividend Aristocrats index, tend to exhibit both lower volatility and net investors higher returns.
Picks for you
While one of these benefits usually comes at the cost of the other — investors are most often faced with the dilemma of choosing between high growth potential and stable dividends, every once in a while, a stock can provide both. Finbold has selected three dividend stocks that Wall Street equity analysts are quite bullish on when it comes to 12-month price forecasts.
HA Sustainable Infrastructure Capital (NYSE: HASI)
HA Sustainable Infrastructure Capital (NYSE: HASI) is a real estate investment trust (REIT) focusing on renewable energy projects. REITs are required by law to pay out at least 90% of their taxable income to shareholders in the form of dividends.
At press time, HASI stock was changing hands at $27.69 — since January of 2024, the price of a HASI share has increased by 5.12%, although it is still trading some 22.5% lower than its November 4 peak of $35.74.
According to the 12 Wall Street researchers who track and issue ratings for the stock, it has an average price target of $40.60 — equating to a 48.39% upside.
Cigna Group (NYSE: CI)
The Cigna Group (NYSE: CI) is an insurance business in the healthcare sector, which provides services to individuals, employers, and government programs both in the United States and abroad.
Since the start of 2024, the price of Cigna stock has decreased by 11.10% — while prices reached a yearly high of $366.85 in mid-September, by the close of the year, prices plummeted, and at press time, a single CI share was changing hands at $317.81.
One of the key drivers of this decline was political — President-elect Donald Trump’s promise to ‘knock out the middlemen’, focused on pharmacy benefit managers (PBMs) coincided with the introduction of a bipartisan bill in Congress that would require insurance giants like Cigna to sell their PBM segments within three years.
Still, there is no guarantee that the bill in question will pass — and Trump has a history of promising policy changes only to then suddenly backtrack. Wall Street doesn’t seem too worried — of the 14 analysts who cover the stock, 12 rate it a ‘Buy’, with only 2 ‘Hold’ ratings. The average price forecast for CI stock 12 months from now sits at $392.57 — some 40.37% higher than prices as of press time.
Celanese Corporation (NYSE: CE)
Our last entry is a slightly more risky play — Celanese Corporation (NYSE: CE) did not have a good year in 2024. In fact, the price of CE stock declined by 55.67% throughout the course of the year, and the company cut its dividend by a whopping 95% following its latest earnings call.
However, this is a temporary measure, aimed at reducing debt — and the business intends to return its dividends to their former glory when conditions are more favorable. At present, Celanese stock is a value play — at a forward price to earnings (PE) ratio of just 6.9, it is incredibly affordable.
Wall Street seems pretty confident that the company’s deleveraging efforts will bear fruit — of the 18 researchers who track and issue ratings for the stock, 4 rate it a ‘Buy’, 10 rate it a ‘Hold’, and 4 rate the stock a ‘Sell’. However, the average 12-month price target for CE stock stands at $91.35 — a mark that would equate to a 38.30% surge from the stock’s price as of press time.
Readers should note, however, that Celanese’s debt-reduction program is far from a done deal — in any case, it will certainly take a long time to play out. However, for those with the necessary risk tolerance and a long time horizon, this could be a good buying opportunity.
Featured image via Shutterstock
