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These 3 Dividend Stocks Could Soar Between 23% and 32%, According to Wall Street

By Keith Speights – Updated Oct 1, 2021 at 9:30AM

Key Points

  • Analysts think that Bristol Myers Squibb stock can soar nearly 32% over the next 12 months.
  • The consensus price target for Enterprise Products Partners reflects a 30% premium to the current share price.
  • Mastercard's dividend yield isn't very high, but analysts project the stock could jump 23% higher.

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Solid dividends plus strong growth? You get both with these stocks.

To use a car analogy, growth stocks are like Lamborghinis. But what about dividend stocks? Most investors probably view them as more like Volvos. Relatively safe -- but not all that exciting.

Don't despair, though, if you're looking for income but also want strong growth. These three dividend stocks could soar between 23% and 32% over the next 12 months, according to Wall Street.

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Image source: Getty Images.

1. Bristol Myers Squibb

Bristol Myers Squibb's (BMY -1.17%) shares are down slightly year to date. However, Wall Street analysts are optimistic about the big drugmaker's prospects. The consensus price target of $80 reflects a premium of nearly 32% to BMS' current share price.

You might wonder why analysts like BMS so much. After all, the company's top-selling drug Revlimid faces generic competition beginning in 2022. In the second quarter, the blood cancer drug generated 27% of BMS' total revenue.

Analysts probably think any sales declines for Revlimid are already fully baked into BMS' share price, as the big pharma stock trades at only 7.6 times expected earnings. They also likely have their eyes on several growth drivers for BMS, notably including cancer immunotherapies Opdivo and Yervoy, and cancer cell therapies Abecma and Breyanzi.

BMS offers an attractive dividend yield of 3.3% on top of its growth prospects. The company has increased its dividend payout by nearly 23% over the last three years. 

2. Enterprise Products Partners

Enterprise Products Partners (EPD 0.04%) appears to be one of Wall Street's favorite cheap oil stocks to buy right now. The average analyst's 12-month price target is nearly 30% higher than the midstream energy company's current share price.

Price-to-free-cash-flow stands out as one of the best metrics to use in valuing oil stocks. Enterprise Products Partners' shares trade at roughly 11.7 times free cash flow. That's well below the valuation level for the stock throughout most of the last five years.

The company has a couple of projects near completion that should boost growth. The Gillis natural gas pipeline connecting Haynesville shale production with liquid natural gas markets in Louisiana should be finished in the fourth quarter of this year. Enterprise also expects to complete the construction of a natural gasoline treater in Texas in Q4.

Meanwhile, Enterprise Products Partners' dividend is especially juicy. Its dividend yield currently tops 8.2%. Although the company has only increased its dividend by 4% over the last three years, few investors will complain about the income that Enterprise provides. 

3. Mastercard

Mastercard (MA -1.26%) delivered a gain of nearly 20% last year. So far in 2021, however, the stock hasn't done much. Wall Street analysts are bullish about the financial giant's near-term future, though. The consensus price target is 23% higher than Mastercard's current share price.

The economic recovery as businesses reopened after COVID-19 lockdowns has helped Mastercard. It reported 36% year-over-year net revenue growth in the second quarter, with earnings jumping 46%.

Mastercard's momentum could accelerate. An increase in international travel as coronavirus fears wane would provide more upside potential. The company's entrance into the "buy now, pay later" market should also give the stock a nice catalyst.

Don't expect too much from Mastercard on the dividend front, though. The company has increased its dividend payout by a whopping 76% over the last three years. However, its dividend yield still stands at only 0.5%.

Keith Speights owns shares of Bristol Myers Squibb, Enterprise Products Partners, and Mastercard. The Motley Fool owns shares of and recommends Bristol Myers Squibb and Mastercard. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.

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