In 2024, major U.S. indices enjoyed a strong performance, largely fueled by the excitement surrounding artificial intelligence and the easing of interest rates. However, as we look ahead to 2025, macroeconomic uncertainties may impact investor confidence. In such a climate, those seeking steady income might want to consider including dividend-paying stocks in their financial strategies.
To help investors select appealing dividend stocks that provide reliable returns backed by sound fundamentals, top Wall Street analysts offer valuable insights.
Here are three dividend-paying stocks recommended by leading Wall Street experts, as tracked by TipRanks, a platform that evaluates analysts based on their historical performance.
Ares Capital
Let’s begin with Ares Capital (ARCC), a specialized finance firm delivering funding solutions to private middle-market businesses. ARCC presents an attractive dividend yield of 8.7%, offering 48 cents per share on a quarterly basis.
RBC Capital analyst Kenneth Lee reiterated his buy rating for ARCC in a research note regarding 2025 forecasts for business development companies (BDC). With a price target set at $23, he named ARCC as RBC’s top BDC pick for the year.
Lee highlighted ARCC’s strong position in the BDC sector, benefitting from its scale, a robust origination engine within the Ares direct lending platform, and nearly two decades of dependable performance. He pointed out ARCC’s distinct advantage in providing flexible capital across various financing solutions, making it stand out from competitors. Other advantages include its impressive risk management track record, access to Ares Credit Group’s resources, and scale advantages, being the largest publicly traded BDC by assets.
Lee also stressed the reliability of ARCC’s dividends, which are supported by core earnings per share and potential net realized gains.
Lee holds a notable rank as No. 23 out of over 9,200 analysts monitored by TipRanks, with his recommendations proving profitable 71% of the time, generating an average return of 18.1%. For more details, check out Ares Capital’s Ownership Structure on TipRanks.
ConocoPhillips
Next, we turn to ConocoPhillips (COP), an exploration and production company within the oil and gas sector. In October, ConocoPhillips reported better-than-expected earnings for the third quarter and increased its full-year output guidance to reflect improved operational efficiencies.
In addition, ConocoPhillips enhanced its quarterly dividend by 34% to 78 cents per share and expanded its share repurchase authorization by up to $20 billion. The stock now boasts a dividend yield of 3%, based on an annualized dividend of $3.12 per share.
In a note on the U.S. oil and gas outlook, Mizuho analyst Nitin Kumar upgraded ConocoPhillips from hold to buy, increasing the price target to $134 from $132. "COP offers an enviable combination of long-duration inventory, a fortress balance sheet, and peer-leading cash returns," remarked Kumar.
He observed that the dip in COP shares following the Marathon Oil acquisition announcement reflects that the minor inventory dilution from the deal is already factored into the stock price. Additionally, Kumar noted the company’s significant confidence in achieving deal synergies far exceeding initial expectations. Specifically, ConocoPhillips anticipates generating around $1 billion annually, doubling the original target of $500 million.
Kumar emphasized that COP expects its 2025 capital expenditure to fall below $13 billion, potentially leading to increased free cash flow. With its expanding LNG presence and robust marketing operations, the company is well-positioned to capitalize on rising global LNG demand.
Nitin Kumar holds a rank of No. 336 out of more than 9,200 analysts on TipRanks, with profitable ratings 58% of the time and an average return of 12.1%. You can explore ConocoPhillips’ Insider Trading Activity on TipRanks.
Darden Restaurants
Finally, let’s take a look at Darden Restaurants (DRI), which owns popular brands such as Olive Garden, LongHorn Steakhouse, Yard House, and Cheddar’s Scratch Kitchen. The company recently reported its second-quarter results for fiscal 2025 and raised its annual sales guidance.
Alongside its Q2 FY25 results, Darden announced a quarterly dividend of $1.40 per share, payable on February 3. The annualized dividend totals $5.60, offering a yield of about 3%.
Following the earnings release, BTIG analyst Peter Saleh maintained a buy rating for DRI and increased the price target to $205 from $195, stating that "management has multiple levers to achieve full-year guidance." He remarked that while the earnings were promising, the effects of hurricanes and a shift in the Thanksgiving calendar overshadowed some favorable sales trends.
Saleh noted the robust performance of the LongHorn Steakhouse and Olive Garden, highlighting an increase in visits from lower- and middle-income consumers, marking a positive shift from recent quarters. Additionally, the rapid rollout of Uber Eats delivery and a narrowing value gap compared to quick-service restaurants, attributed to restrained pricing, bode well for Darden’s future. Overall, Saleh views Darden as a leading restaurant operator delivering consistent earnings growth at an attractive valuation.
Peter Saleh is ranked No. 366 among the more than 9,200 analysts tracked by TipRanks, with profitable ratings 62% of the time and an average return of 11.8%. Check out Darden Restaurants’ Hedge Fund Activity on TipRanks.
