15 Best Income Stocks to Buy According to Analysts

“We established a position in Bristol-Myers Squibb Company, a global biopharmaceutical company focused on discovering, developing, and selling medicines for patients in the therapeutic areas of oncology, immunology, cardiovascular, and neurology. The stock trades at a low valuation relative to its current earnings because the company faces loss of exclusivity on several key drugs over the next eight years, including Revlimid, Eliquis, and Opdivo.

At the same time, Bristol-Myers has multiple new products in the early stages of launch (e.g., Opdualag, Camzyos, Breyanzi, and Reblozyl), a robust new product pipeline (e.g., Deucravacitinib, Milvexian, and CELMoD agents), and a strong balance sheet combined with strong free cash flow generation that the company can use for acquisitions. Management believes these growth drivers can more than offset the loss of exclusivity and drive revenue growth through the end of the decade. Given the company’s low valuation, if the company can execute, we think there is substantial upside in the stock.”

10. Visa Inc. (NYSE:V)

Upside Potential as of May 1: 17.1%

Average Price Target Based on Analyst Ratings: $272.7

Visa Inc. (NYSE:V) is a California-based financial services company that deals in electronic funds transfers throughout the world. In fiscal Q2 2023, the company posted revenue of $8 billion, which showed an 11.1% growth from the same period last year. The company distributed $3.2 billion to shareholders in dividends and share repurchases during the quarter, which makes it one of the best dividend stocks on our list.

Visa Inc. (NYSE:V) currently pays a quarterly dividend of $0.45 per share and has a dividend yield of 0.77%, as of May 1. In 2022, the company stretched its dividend growth streak to 16 years.

Truist highlighted a ‘robust’ payment volume growth in Visa Inc. (NYSE:V)’s recent quarterly earnings and also gave a positive outlook for the next quarter. In view of this, the firm raised its price target on the stock to $270 in April with a Buy rating on the shares.

At the end of Q4 2022, 177 hedge funds in Insider Monkey’s database owned stakes in Visa Inc. (NYSE:V), compared with 165 in the previous quarter. These stakes are worth over $26.4 billion collectively.

Polen Capital mentioned Visa Inc. (NYSE:V) in its Q1 2023 investor letter. Here is what the firm has to say:

“We trimmed Mastercard and Visa Inc. (NYSE:V) to equal weights of the Portfolio. Mastercard and Visa operate as a duopoly in a large and growing market. Over the last 50 years, global personal consumer expenditures (PCE) has grown 7-9% annualized. We expect 4-5% long-term PCE growth going forward. Additionally, the shift from cash to credit continues unabated, with a total credit penetration of only approximately 50% globally.3 This shift provides Visa and Mastercard with another ~4-6% of growth. When combined with PCE, this gives both companies high-single-digit to low-double[1]digit revenue growth opportunities. This growth estimate is before accounting for growth amplifiers like the acceleration of e[1]commerce, the shift from offline to online, and additional services. Both companies enjoy extremely strong network effects that provide strong competitive advantages.

We have trimmed Visa and Mastercard because their combined weight grew to over 12% of the Global Growth Portfolio because of their recent performance and to fund our increase in Amazon’s position size. We added to both positions when their prices were depressed due to cross-border transactions deteriorating materially from the pandemic. Cross-border volumes came roaring back when travel corridors reopened, and although we are several quarters removed from the cross-border nadir, Visa still grew volumes >30% in 1Q23. Total cross-border volumes are now 132% of 2019 levels. At 4.5% each, both companies remain high conviction positions for Global Growth.”

9. American Tower Corporation (NYSE:AMT)

Upside Potential as of May 1: 17.5%

Average Price Target Based on Analyst Ratings: $240.3

American Tower Corporation (NYSE:AMT) is an American real estate investment trust company that owns and operates wireless and broadcast communications infrastructure around the world. In April, Raymond James raised its price target on the stock to $238 with an Outperform rating on the shares, highlighting the company’s strong fundamentals.

In the first quarter of 2023, American Tower Corporation (NYSE:AMT) reported a strong cash position. The company’s operating cash flow came in at over $1 billion and its free cash flow stood at $598 million. Its revenue for the quarter stood at over $2.7 billion, which showed a 4% growth from the same period last year.

American Tower Corporation (NYSE:AMT), one of the best dividend stocks, currently pays a quarterly dividend of $1.56 per share. The company has been raising its dividends consistently for the past 11 years. The stock has a dividend yield of 3.05%, as of May 1.

At the end of Q4 2022, 61 hedge funds tracked by Insider Monkey reported having stakes in American Tower Corporation (NYSE:AMT), worth nearly $3.4 billion collectively.

ClearBridge Investments mentioned American Tower Corporation (NYSE:AMT) in its Q4 2022 investor letter. Here is what the firm has to say:

“Real estate and communication services sectors generated positive returns but lagged others within the Russell 1000 Value Index. The Strategy benefited from its underweight in the real estate sector with American Tower Corporation (NYSE:AMT) as its only holding. REITs are generally perceived to be interest rate sensitive, which negatively impacted American Tower’s recent stock performance. However, we remain confident in the company’s highly durable and predictable business model, which is supported by long-term customer contracts and insatiable wireless data growth.”

8. Thermo Fisher Scientific Inc. (NYSE:TMO)

Upside Potential as of May 1: 17.8%

Average Price Target Based on Analyst Ratings: $653.8

Thermo Fisher Scientific Inc. (NYSE:TMO) is an American supplier of scientific instrumentation and consumables. The company offers a quarterly dividend of $0.35 per share, having raised it by 17% on February 22. This marked the company’s sixth consecutive year of dividend growth, which makes it one of the best dividend stocks on our list. The stock has a dividend yield of 0.25%, as of May 1.

In the first quarter of 2023, Thermo Fisher Scientific Inc. (NYSE:TMO) reported an operating cash flow of $729 million and the company generated $277 million in free cash flow. The company’s revenue for the quarter came in at $10.7 billion, which fell by 9.4% from the same period last year.

Evercore ISI maintained an Outperform rating on Thermo Fisher Scientific Inc. (NYSE:TMO) in April with a $610 price target. The firm also added the stock to its ‘Tactical Outperform’ list.

At the end of Q4 2022, 92 hedge funds in Insider Monkey’s database owned stakes in Thermo Fisher Scientific Inc. (NYSE:TMO), the same as in the previous quarter. The collective value of these stakes is over $7 billion.

Polen Capital mentioned Thermo Fisher Scientific Inc. (NYSE:TMO) in its Q4 2022 investor letter. Here is what the firm has to say:

“Thermo Fisher Scientific Inc. (NYSE:TMO) is a leader in attractive end markets with a skilled management team who has demonstrated the ability to consistently and wisely allocate capital. It is the world leader in serving science. It is a globally scaled supplier serving more than 400,000 customers working within pharmaceutical and biotech companies, hospitals and clinical diagnostic labs, research institutions, and government agencies. Thermo provides many of the products and services that companies in these industries, particularly pharma and biotech, need to operate and drive science forward. The company manufactures and sells instruments, reagents, and consumables used for a wide range of applications in labs. (Click here to view the full text)

7. Applied Materials, Inc. (NASDAQ:AMAT)

Upside Potential as of May 1: 20.1%

Average Price Target Based on Analyst Ratings: $135.7

Applied Materials, Inc. (NASDAQ:AMAT) specializes in the equipment used for the manufacturing of semiconductor chips. The company is one of the best dividend stocks on our list as it has raised its dividends consistently for the past six years. It currently pays a quarterly dividend of $0.32 per share and has a dividend yield of 1.13%, as of May 1.

At the end of Q4 2022, 70 hedge funds in Insider Monkey’s database reported having stakes in Applied Materials, Inc. (NASDAQ:AMAT), growing from 67 in the preceding quarter. These stakes have a collective value of over $3.78 billion. With nearly 7 million shares, Generation Investment Management was the company’s leading stakeholder in Q4.

Davis Advisers mentioned Applied Materials, Inc. (NASDAQ:AMAT) in its annual 2022 investor letter. Here is what the firm has to say:

“If Berkshire represents “growing value” then Applied Materials, Inc. (NASDAQ:AMAT) might be said to represent “undervalued growth.” Founded more than a half century ago, Applied Materials has grown to be the largest supplier of manufacturing tools, services and software to the semiconductor industry. Holding more than 15,000 patents, Applied has become the irreplaceable supplier to the critical global growth industry, semiconductors. Because this company’s earnings can be uneven, short-sighted investors often label this company as “cyclical” and assign it a relatively low valuation.

We disagree and, having perused more than 50 years of data, conclude that Applied is unquestionably a growth company trading at a value price. Figure 8 shows the two sustainable drivers of this growth. The green bars indicate that semiconductor manufacturers have grown industry revenue at 7.5% over the last decade, more than three times the growth of the U.S. economy over this same decade. The orange line indicates that the percentage of this revenue that the industry commits to capital spending has gradually risen from roughly 20% to 30%. Putting these two trends together, it should come as no surprise that Applied has grown revenue at a rate of 11%, and operating income at more than 19% over this same time period.

In the near term, the impact of the chip industry’s post-pandemic inventory correction, which could reduce equipment demand, may more than offset the benefit of recent supply chain issues that limited Applied Materials’ ability to meet customer demand. Longer term, geopolitical tensions between China and the U.S. are driving investment in potentially redundant chip production globally, while at the same time the U.S. and her allies are restricting export of leading edge production tools into China. Even though the near term is frustratingly veiled in uncertainty, the recent shortages and trade restrictions have firmly established that access to chip-production technology is essential to every major industrial economy. Given this, we see more opportunity than risk and estimate that Applied Materials could sell at about 10 times what the company could be earning three-to-five years from now.”

6. Cisco Systems, Inc. (NASDAQ:CSCO)

Upside Potential as of May 1: 22.2%

Average Price Target Based on Analyst Ratings: $57.7

Cisco Systems, Inc. (NASDAQ:CSCO) is a California-based multinational digital communications company. Goldman Sachs initiated its coverage of the stock in March with a Neutral rating. The firm mentioned that the networking equipment stock would benefit from cloud service provider data center investments.

One of the best dividend stocks on our list, Cisco Systems, Inc. (NASDAQ:CSCO) currently pays a quarterly dividend of $0.39 per share. The company has grown its dividends for the past 12 years straight. The stock’s dividend yield on May 1 came in at 3.30%. In addition to CSCO, other best dividend stocks on investors’ radar include McDonald’s Corporation (NYSE:MCD), AbbVie Inc. (NYSE:ABBV), and JPMorgan Chase & Co. (NYSE:JPM).

As of the close of the December quarter, 70 hedge funds tracked by Insider Monkey reported having investments in Cisco Systems, Inc. (NASDAQ:CSCO), up from 68 in the previous quarter. These investments are collectively valued at over $3.03 billion.

Artisan Partners mentioned Cisco Systems, Inc. (NASDAQ:CSCO) in its Q4 2022 investor letter. Here is what the firm has to say:

“We had one sale this quarter, exiting network equipment company Cisco Systems, Inc. (NASDAQ:CSCO). We chose to use the proceeds on more attractive value opportunities as Cisco’s growth has come in below what we had hoped for, and the company is increasingly looking at M&A to augment its growth rate.”