How would you like to get paid to sit back and watch your own stock take off? It’s a scenario most investors would love. But is it unrealistic? No, not with dividend stocks right. Analysts were also able to find only stocks to buy. Here are three high-yielding dividend stocks that Wall Street thinks will grow 41% or more in 2025.
1. AES
AES (AES -3.06%) ranks as the number one seller of renewable energy to corporate customers and operates two of the fastest growing utilities in the United States. The company owns hydroelectric, solar, and wind power generation facilities, as well as natural gas, coal, and pet coke. oil plants.
Although the share price of AES has fallen almost 60% from its peak at the end of 2022, Wall Street expects a recovery. Analysts’ 12-month average price reflects a potential upside of 47%. Of course, not all analysts are bullish for AES. However, in a January survey by LSEG11 of the 16 analysts who cover AES recommend the stock as a “buy” or “strong buy.”
A dividend yield of 5.68% for this option. AES has increased its dividend for 12 consecutive years, most recently announcing a 2% dividend increase last month. It also boasts a healthy payout ratio of 47.5%.
2. CVS Health
You’re probably already at least somewhat familiar CVS Health (CVS 4.35%). The company is one of the largest drugstore retailers in the United States. Its CVS Caremark unit is one of the largest pharmacy benefit managers (PBMs). CVS Health also owns Aetna, one of the largest health insurers.
As was the case with AES, CVS Health’s stock price fell almost 60% below its high. But Wall Street likes this stock going forward. The average price of the 12-month price is 41% above the current share price of CVS. Eighteen of 28 analysts surveyed by LSEG in January rated the stock a “buy” or a “strong buy.” The other 10 analysts recommend holding CVS.
CVS Health had an impressive streak of dividend increases before it acquired Aetna in 2018. After keeping its dividend steady for a few years, the company began increasing the payout again in 2022. Its yield of forward dividend is now in 5.78%.
3. Devon Energy
Devon Energy (DVN 2.39%) is one of the largest oil and gas producers in the United States. It operates in several areas in the United States, with significant production capacity in the Delaware Basin located in West Texas and Southeastern New Mexico.
After a great run after the bottom of the COVID-19 pandemic for oil prices in 2020, Devon’s share price gave up much of its gains. However, the consensus on Wall Street is that the stock could return to its winning ways in the next 12 months. The average price for Devon reflects a potential upside of 42%. Of the 31 analysts surveyed by LSEG in January, 20 rated the stock a “buy” or a “strong buy,” with the others recommending it as a “hold.”
Devon’s dividend consists of two parts: a fixed component and a variable component that fluctuates based on excess free cash flow. Its forward dividend yield is 4.13% right now, but it could easily move higher if oil prices rise.
Is Wall Street right about these stocks?
These high-yielding dividend stocks could reach Wall Street’s price targets over the next 12 months. However, I wouldn’t bet the farm on it.
Federal government policies related to renewable energy may not be favorable for AES with the incoming Trump administration. CVS Health’s Aetna unit continues to face challenges as politicians from both major parties remain skeptical of PBMs. Devon could benefit from a relaxed regulatory environment, but if domestic oil and gas production increases, it could lower fossil fuel prices and negatively impact Devon’s share price.
That said, income investors might like all three of these stocks. Its dividends seem to be safe – and they are certainly juicy.