Major U.S. indexes had a strong run in 2024 thanks to hype around artificial intelligence and interest rate cuts. However, macroeconomic uncertainty may impact 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 stockshighlighted by Top Wall Street Professionals tracked by TipRanks, a platform that rates analysts based on their past performance.
Ares' capital
We start with Ares' capital (ARCC), a specialized financial services provider offering financial solutions to private, medium-sized enterprises. With a quarterly dividend of 48 cents per share, ARCC stock offers a yield of 8.7%.
In a research note on the outlook for business development companies (BDCs) in 2025, an RBC Capital analyst 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 leading position in the BDC market, driven by economies of scale, a strong origination engine on the Ares direct lending platform (covering all MM segments), and ~20 years of experience and solid track record in this space,” Lee said.
The analyst highlighted ARCC's ability to offer clients flexible capital across a variety of financial solutions, which sets it apart from other competitors. Lee also noted the company's other strengths, including the company's impressive track record of end-to-end risk management, access to Ares Credit Group's resources, and advantages of scale considering it is the largest publicly traded BDC by assets.
Lee also highlighted ARCC's dividend, which is supported by the company's underlying earnings per share and potential net realized earnings.
Lee is ranked No. 23 among more than 9,200 analysts tracked by TipRanks. Its ratings were profitable 71% of the time, providing an average return of 18.1%. See Ares capital ownership structure on TipRanks.
ConocoPhillips
We move on to ConocoPhillips (POLICEMAN), an enterprise engaged in oil and gas exploration and production. In October, the company reported better-than-expected third-quarter earnings and raised full-year production forecasts to reflect the impact of operational efficiencies.
Moreover, ConocoPhillips raised its quarterly dividend 34% to 78 cents per share and increased its existing share repurchase authorization to as much as $20 billion. Assuming an annual dividend per share of $3.12, COP stock offers a dividend yield of 3%.
In a research note on U.S. oil and gas prospects, Mizuho analyst Nitin Kumar upgraded ConocoPhillips shares to buy from $132 and raised the price target to $134. “COP offers an enviable combination of long-term inventory, a solid balance sheet and market-leading cash returns,” Kumar said.
The analyst noted that COP shares have declined since the announcement Acquisition of Marathon Oil indicates that the moderate stock dilution resulting from the transaction has already been factored into the share price. Additionally, Kumar noted the company's confidence in achieving significantly higher than expected synergies from the transaction. Specifically, ConocoPhillips expects to generate approximately $1 billion in annual synergies, which is double the original target of $500 million.
Kumar also emphasized that COP expects capital expenditure in 2025 to be below $13 billion, which could translate into additional free cash flow. The analyst believes that with its growing LNG presence and strong commercial marketing business, the company is well positioned to benefit from rising global LNG demand and international prices.
Kumar is ranked 336th among over 9,200 analysts tracked by TipRanks. Its ratings were profitable 58% of the time, providing 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 announced fiscal second-quarter 2025 results and raised its full-year sales guidance.
With the results for the second quarter of fiscal year 25, 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 approximately 3%.
After the results, BTIG analyst Peter Saleh reiterated a buy rating on DRI stock and raised its price target to $205 from $195, stating that “management has multiple leverages to achieve full-year guidance.” He believes that while the results were encouraging, the impact of hurricanes and the shifting of the Thanksgiving calendar overshadowed some favorable sales trends.
Highlighting the strong performance of the LongHorn Steakhouse and Olive Garden chains, the analyst noted that the increase in visits from lower- and middle-income consumers reflects a clear change in trends observed in recent quarters.
Among other positives, Saleh also noted a faster-than-expected adoption of Uber Eats delivery and a narrowing value gap from quick-service restaurants thanks to Darden's moderate pricing. The analyst expects all of these positive factors to translate into strong results in the second half of fiscal 2025. Overall, Saleh sees Darden as an industry-leading restaurant operator delivering consistent earnings growth at a lucrative valuation.
Saleh is ranked 366th among over 9,200 analysts tracked by TipRanks. Its ratings were profitable 62% of the time, providing an average return of 11.8%. See Hedge fund activity in Darden restaurants on TipRanks.