As geopolitical tensions in the Middle East and questions surrounding artificial intelligence spending continue to create headwinds for markets, dividend-paying stocks have emerged as a potential portfolio stabilizer for income-focused investors. Three energy sector companies have recently caught the attention of highly-rated Wall Street analysts, according to research platform TipRanks.
Expand Energy Combines Buybacks with Dividend Returns
Natural gas producer Expand Energy recently made headlines with its $1.25 billion acquisition of Twin Eagle Holdings, a private natural gas marketing and optimization business. The company delivered strong second-quarter results, including $530 million in share repurchases and an announcement of an additional $1 billion buyback authorization.
Expand declared a dividend of nearly 58 cents per share, scheduled for payment on September 3. With an annualized dividend of $2.30 per share, the stock currently offers a yield of 2.5%.
Following the quarterly results, Wolfe Research analyst Doug Leggate maintained his buy rating and raised his price target to $114 from $110. According to CNBC, Leggate highlighted that the company delivered market-beating adjusted earnings per share and EBITDA, driven by improved gas realizations and lower gathering, processing, and transportation costs.
Leggate emphasized that net debt reduction represents the optimal path for enhancing shareholder returns. The company reduced gross debt by $1.3 billion in April and ended the second quarter with $3.1 billion in net debt. He views share buybacks as a secondary option and merger activity as tertiary, noting the Twin Eagle acquisition is expected to lower the company’s breakeven by approximately 7 cents to around $2.80 per thousand cubic feet.
SM Energy Draws Optimism Ahead of Earnings
SM Energy, which operates oil and gas assets across four major U.S. shale basins including the Permian, DJ Basin, South Texas, and Uinta Basin, offers a quarterly dividend of 22 cents per share. This translates to an annualized dividend of 88 cents per share and a yield of approximately 2.7%.
Roth analyst Leo Mariani reaffirmed his buy rating on the stock and increased his price target to $34 from $32 following a preliminary update on second-quarter metrics. According to the reporting, Mariani cited higher oil prices and expectations for a strong quarterly report as rationale for the upgrade.
The analyst noted strong oil and gas price realizations in preliminary data, though the update reflected a cash hedging loss of $220 million from derivatives. Mariani raised his cash flow per share estimate by 3% based on the pricing update and projected oil production of 237,650 barrels per day for the quarter, roughly 1.5% above consensus estimates.
Mariani characterized SM Energy as attractive based on its shareholder capital return program, discounted valuation relative to peers, and growth potential in the Austin Chalk and Uinta plays.
SLB Benefits from International Market Strength
Oilfield services provider SLB, formerly Schlumberger, reported better-than-expected second-quarter earnings, crediting sequential growth across international markets. Activity in Latin America, Europe, Africa, and Asia helped offset disruptions in the Middle East related to U.S.-Iran tensions, according to CNBC’s reporting.
The company announced a quarterly cash dividend of almost 30 cents per share, payable on October 8. At an annualized rate of $1.18 per share, the yield stands at 2.4%.
Goldman Sachs analyst Neil Mehta maintained his buy rating with a $62 price target following the results. Mehta expressed optimism about SLB’s positioning within international oilfield services, projecting international revenue growth of approximately 10% between 2026 and 2027. This outlook is based on the company’s exposure to intervention activity, expected recovery in Middle East operations, higher offshore activity, and potential exploration growth across multiple regions.
The analyst also highlighted the growth trajectory of SLB’s data center business, which the company expects to generate annual run-rate revenue exceeding $2 billion by the end of 2027. Mehta anticipates strong free cash flow and shareholder returns driven by increased activity and the company’s specialized business lines.
All three analysts featured have track records that place them among the top performers tracked by TipRanks, with success rates ranging from 57% to 67% and average returns on their recommendations between 10.1% and 27%.
Source: www.cnbc.com — https://www.cnbc.com/2026/08/02/top-analysts-are-bullish-on-these-dividend-stocks-for-passive-income-.html
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