TipRanks published a list of three dividend stocks that Wall Street analysts like for solid returns. The analysts work at firms that probably shorted these same stocks two quarters ago. They'll short them again in six months. But today? Today they like them.
The article doesn't name the stocks. Classic move. Write 800 words about how certain equities will deliver solid returns without telling anyone which equities. It's like a restaurant review that refuses to name the restaurant. Just describes the pasta as "robust" and "well-positioned for sustained flavor growth."
Dividend stocks exist because companies ran out of ways to grow. They're handing you cash because buying back shares would be too obvious an admission that management has no f*cking clue what to do next. But Wall Street analysts call this "capital allocation discipline." They call a lemonade stand "a vertically integrated beverage distribution platform" if you pay them enough.
Retail traders will read this headline and think they've stumbled onto insider knowledge. They haven't. They've stumbled onto the financial media equivalent of a horoscope. "Three stocks will do well" is the same information density as "you will meet someone interesting this week." Congratulations. You've learned nothing, but you feel smarter.
The analysts quoted probably changed their rating three times this year. Upgraded in January. Downgraded in March. Upgraded again last week because the stock dropped enough to make the dividend yield look attractive. This is not analysis. This is a Ouija board with a Bloomberg terminal.
Solid returns. That's the phrase they went with. Not great returns. Not exceptional returns. Solid. The financial equivalent of telling someone their baby is "healthy." Technically positive, but notably lacking enthusiasm. These analysts looked at three dividend stocks and thought "yeah, these probably won't implode." TipRanks turned that into a headline. Someone will buy shares Monday morning because of it.
The analysts will be flat wrong, collect their salaries anyway, and issue new recommendations next quarter that contradict these ones completely.
Photo by Andy Kennedy on Unsplash
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