Top Wall Street analysts predict these dividend stocks for 2025.
In 2024, major U.S. indices experienced growth due to the excitement surrounding artificial intelligence and lower interest rates. However, macroeconomic uncertainty may negatively impact investor sentiment in 2025. As a result, investors seeking regular income may want to consider adding dividend stocks to their portfolios.
Strong fundamentals and consistent payments are what top Wall Street analysts can help investors find in attractive dividend stocks.
Three dividend-paying stocks recommended by Wall Street's top pros, as ranked by TipRanks, a platform that evaluates analysts' past performance.
Ares Capital
ARCC is a specialty finance provider that provides financing solutions to private middle-market companies. Its quarterly dividend of 48 cents per share translates to an 8.7% yield.
Kenneth Lee, an RBC Capital analyst, reaffirmed his buy rating on ARCC with a price target of $23, stating that it is his top BDC pick for 2025.
According to Lee, ARCC holds a dominant position in the BDC industry, thanks to its substantial scale, robust origination engine on the Ares direct lending platform (covering all MM segments), and over 20 years of proven success in the space.
The analyst emphasized that ARCC's adaptability in providing capital across diverse financing options for clients sets it apart from its competitors. Additionally, Lee pointed out other strengths, such as ARCC's successful track record in managing risks throughout the cycle, access to the resources of the Ares Credit Group, and its size advantage as the largest publicly traded BDC by assets.
Lee highlighted ARCC's dividends, which are supported by the company's core earnings per share and possible net realized gains.
Among more than 9,200 analysts tracked by TipRanks, Lee ranks No. 23. His ratings have been profitable 71% of the time, delivering an average return of 18.1%. Check out the Ares Capital Ownership Structure on TipRanks.
ConocoPhillips
COP, an oil and gas exploration and production company, delivered better-than-expected third-quarter earnings in October and increased its full-year output guidance due to operational efficiencies.
ConocoPhillips increased its quarterly dividend by 34% to 78 cents per share and increased its existing share repurchase authorization by up to $20 billion. With an annualized dividend per share of $3.12, COP stock provides a dividend yield of 3%.
In a research note on the U.S. oil and gas outlook, Mizuho analyst Nitin Kumar upgraded ConocoPhillips stock to buy from hold and raised the price target to $134 from $132. According to Kumar, COP offers an enviable combination of long-duration inventory, a fortress balance sheet, and peer-leading cash returns.
The analyst observed that the decline in COP shares following the Marathon Oil acquisition suggests that the moderate inventory dilution resulting from the deal has already been factored into the stock. Furthermore, Kumar noted that ConocoPhillips is optimistic about achieving significantly higher-than-expected deal synergies. Specifically, the company anticipates generating approximately $1 billion in annual synergies, which is double its initial goal of $500 million.
COP aims to keep its 2025 capital expenditure below $13 billion, which could result in extra free cash flow. The analyst predicts that the company's expanding LNG presence and robust commercial marketing business will enable it to benefit from the increasing global LNG demand and international pricing.
Among more than 9,200 analysts tracked by TipRanks, Kumar ranks No. 336. His ratings have been profitable 58% of the time, delivering an average return of 12.1%. Check out ConocoPhillips Insider Trading Activity on TipRanks.
Darden Restaurants
DRI, a restaurant company that owns several popular brands, recently announced its results for the second quarter of fiscal 2025 and raised its annual sales guidance.
The company announced a quarterly dividend of $1.40 per share, payable on Feb. 3. At a yield of about 3%, DRI offers an annualized dividend of $5.60.
DRI stock's buy rating and price target were reiterated by BTIG analyst Peter Saleh, who believes that management has several ways to achieve full-year guidance. Saleh thinks that although the results were positive, the effects of hurricanes and the Thanksgiving calendar shift obscured some positive sales trends.
The analyst observed a significant turnaround in the performance of LongHorn Steakhouse and Olive Garden chains, as evidenced by the increase in visits from lower- and middle-income consumers.
Saleh highlighted the quicker-than-expected launch of Uber Eats delivery and the narrowing price gap with fast-food chains due to Darden's controlled pricing as among the benefits. He predicts that these factors will result in strong performance in the second half of fiscal 2025. In his view, Darden is a top restaurant operator with a track record of steady earnings growth at an attractive valuation.
Among more than 9,200 analysts tracked by TipRanks, Saleh ranks No. 366. His ratings have been profitable 62% of the time, delivering an average return of 11.8%. Check out Darden Restaurants Hedge Funds Activity on TipRanks.
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