Major U.S. indexes performed well in 2024, thanks to buzz around artificial intelligence and interest rate cuts. However, macro uncertainty could affect investor sentiment in 2025. In this scenario, investors looking for regular income may consider adding dividend stocks to their portfolios.
Top Wall Street analysts can help investors select attractive dividend stocks that offer consistent payouts, backed by strong fundamentals.
Here are three dividend paying stockspointed out The best professionals of Wall Street as tracked by TipRanks, a platform that ranks analysts based on their past performance.
Ares Capital
We start with Ares Capital (ARCC), a specialized financial services provider that offers financial solutions to privately held mid-market companies. With a quarterly dividend of 48 cents per share, ARCC stock offers a yield of 8.7%.
In a research note on the 2025 outlook for business development companies (BDCs), analyst RBC Capital Kenneth Lee reiterated a buy rating on ARCC with a $23 price target, calling it RBC’s favorite BDC name for 2025.
“ARCC has a leadership position in the BDC space, with the advantages of scale, a strong driving force in the Ares direct lending platform (coverage of all MM segments) and ~20 years of experience and solid performance in the space,” said Lee.
The analyst pointed to ARCC’s ability to offer flexible capital in a variety of financial solutions for clients as a differentiator among others. Lee also highlighted other strengths, including the firm’s impressive history of risk management through the cycle, access to Ares Credit Group’s resources and advantages of scale, given that it is the largest publicly traded BDC by assets.
Lee also emphasized ARCC’s dividends, which are supported by the company’s underlying earnings per share and potential net realized gains.
Lee is ranked No. 23 among more than 9,200 analysts tracked by TipRanks. Its ratings were profitable 71% of the time, yielding an average return of 18.1%. See Ownership structure of Ares Capital on TipRanks.
ConocoPhillips
We are moving to ConocoPhillips (POLICEMAN), an oil and gas exploration and production company. In October, the company reported better-than-expected third-quarter earnings and raised its full-year production guidance to reflect the impact of operational efficiency.
Moreover, ConocoPhillips increased its quarterly dividend by 34% to 78 cents per share and increased its existing share repurchase authorization by up to $20 billion. Based on an annual dividend per share of $3.12, COP stock offers a dividend yield of 3%.
In a research note on the outlook for US oil and gas, Mizuho analyst Nitin Kumar upgraded ConocoPhillips shares to Buy from Hold and raised its price target to $134 from $132. “COP offers an enviable combination of long-lived inventory, a fortress balance sheet and leading cash returns,” Kumar said.
The analyst noted that COP shares have fallen since the announcement Purchase of Marathon Oil indicates that the moderate inventory reduction resulting from the deal has already been factored into the stock. In addition, Kumar highlighted the company’s confidence in achieving deal synergies that are significantly higher than expected. Specifically, ConocoPhillips expects to generate about $1 billion in annual synergies, double its initial target of $500 million.
Kumar also emphasized that COP expects its capital expenditures to be under $13 billion in 2025, which could translate into additional free cash flow. The analyst believes that the company, with its growing LNG presence and strong commercial marketing, is well-positioned to profit from rising global LNG demand and international prices.
Kumar is ranked #336 out of more than 9,200 analysts tracked by TipRanks. Its ratings were profitable 58% of the time, yielding an average return of 12.1%. See ConocoPhillips’ insider trading activity on TipRanks.
Darden restaurants
Finally, let’s take a look Darden restaurants (DRI), a restaurant company that owns several popular brands such as Olive Garden, LongHorn Steakhouse, Yard House and Cheddar’s Scratch Kitchen. The company recently reported its results for the second quarter of fiscal 2025 and increased its annual sales guidance.
With Q2 FY25 results, the company announced a quarterly dividend of $1.40 per sharepayable on February 3. With a quarterly dividend of $1.40 per share (annual dividend of $5.60), DRI offers a yield of about 3%.
After the results, the BTIG analyst Peter Saleh reiterated a buy rating on DRI stock and raised its price target to $205 from $195, saying “management has multiple levers to achieve full-year guidance.” He believes that while the results were encouraging, the impact of the hurricane and the shift in the Thanksgiving calendar overshadowed certain favorable sales trends.
Noting the strong performance of the LongHorn Steakhouse and Olive Garden chains, the analyst noted that the increase in visits by lower- and middle-income consumers reflects a significant reversal from trends seen in recent quarters.
Among other positives, Saleh also noted the faster-than-expected rollout of Uber Eats delivery and a narrowing of the value gap compared to quick-service restaurants, thanks to Darden’s capped prices. The analyst expects all these positive factors to drive a strong performance in the second half of fiscal 2025. Overall, Saleh sees Darden as a leading restaurant operator that delivers consistent earnings growth at a lucrative valuation.
Saleh is ranked #366 out of more than 9,200 analysts tracked by TipRanks. Its ratings were profitable 62% of the time, yielding an average return of 11.8%. See Darden Restaurants Hedge fund activity on TipRanks.
