Top Wall Street analysts are upbeat on these 3 dividend stocks for enhanced returns

The US Federal Reserve cut key interest rates by 25 basis points, lowering borrowing costs for the third time in 2025. Given the low interest rate environment (which reduces the attractiveness of fixed-income investments) and the unstable stock market, some investors may consider adding dividend stocks to their portfolios to generate stable income and increase overall returns.

Stock picks from top Wall Street analysts can help investors choose attractive dividend-paying companies.

Here are three dividend-paying stocks highlighted by Wall Street’s top pros tracked by TipRanks, a platform that ranks analysts based on their past performance.

This week’s first dividend pick Devon Energy (DVN) is an independent oil and natural gas exploration and production (E&P) company. In the third quarter of 2025, Devon returned $401 million to shareholders through share buybacks and dividends. The company’s fixed quarterly dividend of $0.24 per share (annual dividend of $0.96 per share) indicates a yield of 2.5%.

Recently, JP Morgan analyst Arun Jayaram upgraded Devon Energy shares to buy from hold, but lowered the stock price. price target $44 It starts at $49. TipRanks’ AI Analyst has an “outperform” rating on DVN stock with a $43 price target.

Jayaram explained that the rating upgrade was based on DVN’s impressive valuation relative to its peers and was supported by free cash flow gains from the company’s $1 billion business optimization plan. The 5-star analyst noted that Devon has reached nearly 60% of its $1 billion goal in just over six months since the plan was officially launched.

Devon’s Delaware Basin well productivity has been negatively impacted by the company’s focus on completing a higher proportion of its Wolfcamp B wells, the analyst noted. However, Jayaram expects well productivity to be stable in 2026 and 2027 due to a “more stable mix of secondary zones” compared to 2025.

Overall, Jayaram is bullish on Devon due to its prime land position in prime parts of the Delaware Basin, Bakken and Eagle Ford shale regions. The company also has the option to expand in the STACK and Powder River Basins.

“We believe DVN’s core franchise assets have the potential to provide a broad inventory of low-risk, high-return development drilling opportunities, which is critical given the depleting nature of E&P’s asset base,” Jayaram said.

Jayaram is ranked #655 out of more than 10,100 analysts followed by TipRanks. Their ratings were profitable 59% of the time, with an average return of 10.3%. See Devon Energy Statistics on TipRanks.

Next dividend paying stock EOG Resources (EOG) is a crude oil and natural gas exploration and production company with reserves in the United States and Trinidad. EOG paid $545 million in regular dividends and repurchased shares worth $440 million in the third quarter of 2025. Last month, EOG announced a quarterly dividend of $1.02 per share, payable on January 30, 2026. With an annual dividend of $4.08, EOG’s yield stands at 3.7%.

Siebert Williams Shank analyst Gabriele Sorbara reaffirmed his buy rating on EOG shares price target $150. The stock also receives an “outperform” rating from TipRanks’ AI Analyst with a $127 price target.

Sorbara sees EOG as the “premier” large-cap company with the ability to navigate commodity cycles, supported by its solid balance sheet and strong inventory. The analyst also noted the company’s massive free cash flow generation capabilities.

In particular, Sorbara emphasized EOG’s commitment to returning at least 70% of its free cash flow to shareholders annually through dividends and share buybacks. In fact, the energy company has the flexibility to return 100% of its free cash flow, depending on its balance sheet strength.

The 5-star analyst also noted EOG’s efforts to leverage advanced technology to capture more opportunities in the Delaware Basin; The company is currently identifying more than nine different development goals. Among other positives, Sorbara also noted that EOG is on track for its first-year goal in terms of $150 million in synergies from its acquisition of Encino. Further savings are expected from factors such as improved infrastructure, production efficiency and marketing agreements through EOG’s midstream network.

Sorbara is ranked #225 out of more than 10,100 analysts followed by TipRanks. It did well in the ratings 61% of the time and delivered an average return of 18.4%. See EOG Resources Ownership Structure on TipRanks.

Finally, let’s look at the pharmacy chain CVS Health (CVS). The company’s turnaround efforts help improve performance in a challenging business environment. CVS Health offered positive updates at its Investor Day event on December 9, stating that it expects to achieve a compound annual growth rate (CAGR) of adjusted earnings per share (EPS) in the mid-teens by 2028. With a quarterly dividend of $0.665 per share (annual dividend of $2.66 per share), CVS stock offers a 3.4% yield.

Following Investor Day, Mizuho analyst Ann Hynes reiterated a Buy rating on CVS shares and upgraded her rating price target $95 It starts at $88. “CVS is our top pick in our coverage universe,” the 5-star analyst said, citing structural improvement in retail earnings estimates as the reason for the revised price target. Interestingly, TipRanks’ AI Analyst has a “neutral” rating on CVS with an $81 price target.

Hynes noted that CVS’s adjusted EPS CAGR target for the mid-teens does not take into account any additional share buybacks, which he expects to occur once the company reaches its leverage targets, likely by the end of next year.

The analyst also noted the company’s efforts to improve the margins of its Healthcare Benefits (HCB) segment, which has been under pressure due to the continued rise in the medical loss ratio (MLR). This rate is expected to decline approximately 50 basis points in 2026 due to better pricing, reduced benefits under Medicare Advantage (MA) plans, and the company’s decision to exit the Health Insurance Exchange (HIX) business.

Hynes also noted the improvement in the outlook for CVS’ Pharmacy and Consumer Health (PCW) segment; The company now expects flat adjusted operating income growth compared to previous guidance for a mid-single-digit decline. This improvement is due to market share gains, a better reimbursement infrastructure and cost savings.

Hynes is ranked #733 out of more than 10,100 analysts followed by TipRanks. Their ratings were successful 60% of the time and produced an average return of 8.5%. See CVS Health Options Event on TipRanks.