Top Dividend Stocks Predicted by Wall Street to Surge Over 41% in 2025's Markets
Hey there, folks! Fancy earning a buck while kicking back and watching your shares soar? Well, dive into these top-notch dividend stocks that Wall Street's feeling pretty bullish about, projects to skyrocket 41% or more by 2025!
1. AES
This titan in the realm of renewable energy distribution, AES, ranks high among corporate customers and boasts two speedy-growing U.S. utilities. AES' energy-producing portfolio spans hydroelectric, solar, and wind power-generation facilities -- the standard fare -- as well as some less common ones, including natural gas, coal, pet-coke, and oil power plants.
AES' share price has dropped a humbling 59% since its late 2022 peak, but Wall Street sees hope on the horizon. The average 12-month price target brings an 47% upside potential, although not every analyst is on board with the bullish sentiment. In a January survey by big-time financial data firm LSEG, eleven out of sixteen analysts touted AES as a prime buy or strong buy candidate.
But let's talk about the dividend game! With an enticing 5.68% forward dividend yield, AES has successfully increased its dividend for an impressive twelve years running. Most recently, AES announced a slight 2% dividend raise late last month, and it maintains a healthy 47.5% payout ratio.
2. CVS Health
Chances are, you're already hip to CVS Health, a pharmacy retail behemoth in the United States. You’ve probably heard about its CVS Caremark unit, a major player in the pharmacy benefits industry, or its affiliation with one of the largest health insurers, Aetna.
Like AES, CVS Health has been hit hard by recent downturns, plunging 57% from its best days. Yet, Wall Street isn't letting the low mood get in the way of a good thing. The average 12-month price target for CVS sits at a 41% premium above its present share value. In January's LSEG survey, eighteen out of twenty-eight analysts gave the stock a "buy" or "strong buy" rating, while another ten advised merely holding onto CVS.
Before its Aetna acquisition in 2018, CVS Health had established a six-year streak of dividend hikes. Once Aetna was on board, dividend increases were put on hold for a few years, but in 2022, the dividend started to climb again. Currently, CVS Health boasts a sweet 5.78% forward dividend yield.
3. Devon Energy
Hailing from the United States, Devon Energy is a big player in the oil and gas production game, with significant operations across numerous regions. It has ample production capabilities in the Delaware Basin, a beloved area in West Texas and Southeastern New Mexico.
The Devon stock has seen significant gains post-pandemic but has mostly given them back. However, Wall Street holds out hope for its return to form over the next 12 months, with the average price target indicating a 42% upside opportunity. According to January's LSEG survey, 20 out of 31 analysts recommended a "buy" or "strong buy," while the rest pinned a "hold" on Devon.
Devon's dividend is chock-full of two components: a fixed rate and a variable one that fluctuates with excess free cash flow. The forward dividend yield currently sits at 4.13%, which could swell if oil prices should skyrocket.
Wall Street: Yay or Nay?
These high-yield dividend stocks could chase Wall Street's price targets over the next year, but placing all your bets on them might be a stretch.
There are various government policy factors affecting AES, like renewable energy policies potentially becoming less favorable with the new U.S. administration. CVS Health's Aetna unit faces challenges, and politicians from both major parties are doubtful about pharmacy benefits managers (PBMs). Devon's future may hold benefits from a more relaxed regulatory environment, but an increase in U.S. oil and gas production could cap prices and negatively affect the stock.
But fear not, income investors! These dividends are looking pretty tasty and juicy, even if we can't bet on average 41% returns by 2025.
- For individuals interested in diversifying their investment portfolio, considering investing in Devon Energy's dividends could be beneficial. The oil and gas producer has a forward dividend yield of 4.13%, which could potentially increase if oil prices rise.
- In the realm of finance, it's essential to conduct thorough research and consult with a financial advisor before making any investment decisions. Despite potential challenges, the high-yield dividends offered by AES, CVS Health, and Devon Energy might make them compelling options for investors seeking income.
