3 High-Yield Dividend Stocks That Could Jump 15% to 24%, According to Wall Street

We’re used to binary choices. Option A or option B. True or false. Yes or no. Some investors might put high dividend yields or strong share-price appreciation into the mix, as well.

It’s true that many stocks with great yields don’t offer the potential for great returns. However, that’s not always the case. Here are three high-yield dividend stocks that could jump 15% to 24%, according to Wall Street.

1. AT&T

You probably won’t be surprised that AT&T (T) offers an especially juicy dividend. The telecom-giant’s dividend yield currently tops 8.7%. But you might be at least a little surprised at how bullish Wall Street analysts are about the stock. The consensus 12-month price target for AT&T reflects an upside potential of 24%.

It’s not just analysts on Wall Street who like AT&T’s prospects. Billionaires have been loading up on the stock, as well, including Renaissance Technologies’ super-successful leader Jim Simons and Susquehanna International’s Jeff Yass.

AT&T plans to spin off WarnerMedia and merge the business with Discovery Communications. This deal, which is expected to close in the second quarter of 2022, could unlock value for shareholders. 

However, the transaction will also result in a big cut to AT&T’s dividend payout. The good news for income investors, though, is that the company should remain among the top dividend payers around, even with its significantly lower dividend.

2. Medical Properties Trust

Medical Properties Trust (MPW) isn’t a household name like AT&T is. It’s a stock that income investors might want to have on their list, though. MPT’s dividend yields more than 5.2%. And the average analysts’ price target for the stock is 23% higher than the current share price.

The company is organized as a real estate investment trust (REIT), which means that it must return at least 90% of taxable income to shareholders in the form of dividends. MPT has increased its dividend for nine consecutive years. That’s especially noteworthy considering that many of its healthcare REIT peers have cut their dividends. 

MPT focuses on hospitals. It owns around 440 facilities with 46,000 licensed beds in nine countries. These properties are leased to 53 hospital-operating companies. MPT also has a robust pipeline that CEO Ed Aldag said in the company’s Q4 conference call “could be as big as we want it to be.”

Those pipeline opportunities are likely one key reason behind Wall Street’s bullish view of MPT. The stock is also attractively priced, with shares trading at only 11.2 times expected earnings.

3. Enterprise Products Partners

Enterprise Products Partners (EPD) is another high-yield stock that analysts really like. The midstream energy-company’s dividend yield currently stands at nearly 7.6%. The consensus Wall Street price target for Enterprise reflects a 15% upside potential.

That outlook could be too conservative. Enterprise’s shares have already jumped 14% so far in 2022. The dynamics for the oil and gas markets are stronger than they’ve been in years.

Demand for U.S. crude oil, natural gas, and natural gas liquids (NGLs) could increase over both the short term and long term as a result of Russia’s invasion of Ukraine. That could provide a huge tailwind for Enterprise. The company owns more than 50,000 miles of NGL, crude oil, natural gas, petrochemicals, and refined products pipelines plus other midstream energy assets.

It could also bode well for income investors who buy Enterprise stock. Long-term unitholders have had plenty to like. Enterprise has increased its distribution for 23 consecutive years, with a compound annual growth rate of 7%.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Keith Speights owns Enterprise Products Partners. The Motley Fool recommends Discovery (C shares) and Enterprise Products Partners. The Motley Fool has a disclosure policy.

Originally published on Fool.com

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