5 Best Income Stocks to Buy According to Analysts

In this article, we discuss 5 best income stocks according to analysts. If you want to read our detailed analysis of dividend investing and the performance of dividend stocks in the past, go directly to read 15 Best Income Stocks to Buy According to Analysts. 

5. Analog Devices, Inc. (NASDAQ:ADI)

Upside Potential as of May 1: 22.4%
Average Price Target Based on Analyst Ratings: $220.3

Analog Devices, Inc. (NASDAQ:ADI) is an American semiconductor manufacturing company that also specializes in data conversion. In February, BMO Capital raised its price target on the stock to $215 with an Outperform rating on the shares, highlighting the company’s quarterly performance. The firm also appreciated the company’s strong free cash flow growth.

Analog Devices, Inc. (NASDAQ:ADI) currently pays a quarterly dividend of $0.86 per share and has a dividend yield of 1.91%, as of May 1. The company has raised its payouts 20 times in the past 19 years, which makes it one of the best dividend stocks on our list.

According to Insider Monkey’s Q4 2022 database, 75 hedge funds owned stakes in Analog Devices, Inc. (NASDAQ:ADI), up from 66 in the previous quarter. These stakes have a collective value of over nearly $5 billion.

Giverny Capital mentioned Analog Devices, Inc. (NASDAQ:ADI) in its Q4 2022 investor letter. Here is what the firm has to say:

“Ashtead Group and Analog Devices, Inc. (NASDAQ:ADI) were new purchases, made in May. They both performed well from our original purchase prices and I believe we upgraded the quality of our portfolio by adding them.

We established four new positions during the year, each of about 2%: Analog Devices, Ashtead Group, Floor & Décor, and Installed Building Products. We discussed these in prior letters and I’m pleased to report that Ashtead and Analog were among our best performing positions for the year.”

4. Pfizer Inc. (NYSE:PFE)

Upside Potential as of May 1: 22.5%
Average Price Target Based on Analyst Ratings: $47.6

Pfizer Inc. (NYSE:PFE) is next on our list of the best dividend stocks. On April 26, the company declared a quarterly dividend of $0.41 per share, which was in line with its previous dividend. It has been raising its dividends consistently for the past 13 years. The stock’s dividend yield on May 1 came in at 4.22%.

BofA maintained a Neutral rating on Pfizer Inc. (NYSE:PFE) in April with a $45 price target, giving a positive outlook on the company’s upcoming quarters.

At the end of December 2022, 75 hedge funds tracked by Insider Monkey owned investments in Pfizer Inc. (NYSE:PFE), with a collective value of over $2.5 billion.

Diamond Hill Capital mentioned Pfizer Inc. (NYSE:PFE) in its Q3 2022 investor letter. Here is what the firm has to say:

“Also among our bottom contributors were health care products manufacturer Abbott Labs, global pharmaceutical company Pfizer Inc. (NYSE:PFE), media and technology giant Alphabet, and insurance company American International Group (AIG). Although Pfizer continues to report strong performance of its core drugs, sales of its COVID vaccine and treatment have likely peaked and sales are expected to decline going forward. We remain optimistic about the company long term as we believe management is taking the company in the right direction, focusing R&D, and making strategic acquisitions with profits generated from COVID vaccine sales.”

3. Bank of America Corporation (NYSE:BAC)

Upside Potential as of May 1: 24.1%
Average Price Target Based on Analyst Ratings: $36.3

Bank of America Corporation (NYSE:BAC) is an American financial services company. In April, RBC Capital raised its price target on the stock to $35 with an Outperform rating on the shares, appreciating the company’s diversified business model. The firm also highlighted the company’s interest-sensitive balance sheet.

Bank of America Corporation (NYSE:BAC), one of the best dividend stocks, has been growing its dividends consistently for the past nine years. It currently pays a quarterly dividend of $0.22 per share and has a dividend yield of 3.01%, as of May 1.

At the end of Q4 2022, Bank of America Corporation (NYSE:BAC) was a part of 100 hedge fund portfolios, as per Insider Monkey’s data. The stakes owned by these hedge funds have a total value of $37.5 billion.

Oakmark Funds mentioned Bank of America Corporation (NYSE:BAC) in its Q1 2023 investor letter. Here is what the firm has to say:

“The Oakmark Equity and Income Fund has 29% of its equity portfolio in financials. This made the March sell-off painful, but we do not believe that this has meaningfully changed the value of most of our financial equity holdings. In fact, we were adding to financial positions throughout March. We believe that one way to analyze our financial holdings is to look at them in different buckets given their various business models and risk profiles. Almost 30% of our financial exposure is in insurance companies and insurance brokers. Insurance companies have very stable liability profiles, so the main risk is a change in asset values. We are comfortable with their investment portfolios and think these stocks are quite attractive. Around 5% of our financials are asset managers. This leaves a little over 40% of the financials exposure in a varied group of banks and lenders. About 5% of that portfolio is in Bank of America Corporation (NYSE:BAC) and State Street. These two banks are designated as Systematically Important Financial Institutions and are held to higher regulatory standards. Our largest single financials holding is Bank of America, which has grown deposits during March, and we believe it is one of the best managed companies in the sector.”

2. QUALCOMM Incorporated (NASDAQ:QCOM)

Upside Potential as of May 1: 25.5%
Average Price Target Based on Analyst Ratings: $146.6

QUALCOMM Incorporated (NASDAQ:QCOM) is a California-based multinational semiconductor company. In March 2023, the company raised its quarterly dividend for the 20th consecutive year, which makes it one of the best dividend stocks. It currently pays a quarterly dividend of $0.80 per share and has a dividend yield of 2.73%, as of May 1.

In March, Susquehanna upgraded QUALCOMM Incorporated (NASDAQ:QCOM) to Positive and also lifted its price target on the stock to $140, appreciating the company’s China opening.

At the end of December 2022, 82 hedge funds in Insider Monkey’s database owned stakes in QUALCOMM Incorporated (NASDAQ:QCOM), up from 80 in a quarter earlier. These stakes have a consolidated value of nearly $2.4 billion.

Madison Investment Management mentioned QUALCOMM Incorporated (NASDAQ:QCOM) in its Q4 2022 investor letter. Here is what the firm has to say:

“QUALCOMM Incorporated (NASDAQ:QCOM) continues to be challenged by headwinds in the smartphone supply chain with an expected decline in units for 2022. Despite solid gains in the Internet of Things and Auto segments, Qualcomm’s dominant business remains the smartphone market. We expect to see stabilization of the smartphone market in 2023, including a recovery in China.”

1. ConocoPhillips (NYSE:COP)

Upside Potential as of May 1: 29.3%
Average Price Target Based on Analyst Ratings: $133.1

ConocoPhillips (NYSE:COP) is an American multinational energy company. It tops our list of the best dividend stocks and currently pays a quarterly dividend of $0.51 per share. It has been making regular dividend payments since 1993 and also maintains a seven-year streak of consistent dividend growth. The stock’s dividend yield on May 1 came in at 5.19%.

At the end of December 2022, 67 hedge funds tracked by Insider Monkey held stakes in ConocoPhillips (NYSE:COP), up from 64 in the previous quarter. These stakes have a consolidated value of roughly $3 billion.

Oakmark Funds mentioned ConocoPhillips (NYSE:COP) in its Q1 2023 investor letter. Here is what the firm has to say:

“ConocoPhillips (NYSE:COP) is one of the largest and lowest cost U.S. exploration and production companies in the country, led by CEO Ryan Lance—in our view one of the best value creators in the industry. ConocoPhillips’s share prices fell in the first quarter as oil prices receded, which is not atypical. We were buying the company at prices where it could generate its entire market cap in free cash flow over the next decade while growing the production such that at the end of that time, the base of production would be one-third higher. This sort of reinvestment opportunity is unique to ConocoPhillips and clearly not reflected in the current share price.”

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