Three Wall Street analysts reiterate buys on Kinetik, SLB, IBM; raise price targets amid 2.5%-7% dividend yields
Goldman Sachs, RBC Capital, and Bank of America analysts reiterated buy ratings and raised price targets on three dividend stocks: Kinetik (7% yield) on sour gas growth, SLB (2.5% yield) on international oilfield activity, and IBM (2.7% yield) on AI-driven mainframe demand.
RBC Capital analyst Elvira Scotto raised her price target on Kinetik to $53 from $50 and reiterated a buy rating, citing expected growth from the KL2 project and sour gas opportunity in New Mexico. The midstream company pays a quarterly dividend of 81 cents per share (annualized dividend of $3.24 per share), offering a dividend yield of about 7%. Scotto updated estimates following Kinetik's Q1 2026 adjusted EBITDA beat, driven by improved margins and Gulf Coast marketing gains that offset Waha price-related shut-ins.
Scotto sees the Northern Delaware Basin in New Mexico as a major growth opportunity for Kinetik, noting the company has purpose-built its system for sour gas handling, giving it an edge over new competitors that may face permitting delays of at least three years to build acid gas injection wells. She highlighted Kinetik's capital return framework, which targets a 3.5x to 4.0x leverage ratio, 3% to 5% hike in annual dividend until dividend coverage reaches 1.6x, and opportunistic share buybacks. Scotto called Kinetik a logical takeout candidate for buyers seeking equity NGL barrels and sour gas processing.
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