Analysts prefer these dividend stocks for boosting portfolio returns

Dividend stocks continue to be a popular choice for investors looking for stable income and higher portfolio returns. But with thousands of dividend-paying companies to choose from, identifying the right stocks can be difficult.

In this context, recommendations from leading Wall Street analysts can provide useful insight and help identify dividend stocks that are backed by solid fundamentals and have attractive upside potential.

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.

Permian Resources

Independent oil and gas company Permian Resources (public relations) is the first dividend stock of this week. The company recently paid a quarterly cash dividend of 16 cents per share. With an annual dividend rate of 64 cents per share, PR offers a 3.5% dividend yield.

Evercore analyst Chris Baker recently began covering Permian Resources shares. price target $25. The analyst believes the company is well positioned to benefit from the recovery in US shale demand in the wake of the Iran conflict, thanks to its low breakeven stock, which could boost free cash flow growth. Baker also noted PR’s disciplined consolidation in the Permian Basin.

Additionally, the 5-star analyst emphasized that the company is focused on a single basin and that management is allocating capital efficiently across expansion efforts, strategic acquisitions and share repurchases. Baker noted that management has focused investments on the high-yield Northern Delaware Basin, which has helped increase profitability.

“The key part of our work here, and the reason we think PR deserves a higher multiple than more finite or less flexible shale stories, is that PR operates an acquisition and exploitation model,” Baker said.

He explained that Permian Resources deserves a premium valuation because it continually acquires and develops new high-quality assets rather than relying on a limited inventory; This is a strategy that is underappreciated by the market.

Baker is ranked #862 out of more than 12,300 analysts tracked by TipRanks. Its ratings were successful 75% of the time, with an average return of 48.3%. See Permian Resource Ownership Structure on TipRanks.

Valero Energy

Valero Energy (VLO) is a manufacturer and marketer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products. With a quarterly dividend of $1.20 per share or an annual dividend of $4.80 per share, VLO shares offer a yield of approximately 2%.

Heading into Valero’s second-quarter earnings call on July 30, Goldman Sachs analyst Neil Mehta reiterated a buy rating on VLO shares and price target $286 It starts at $283, reflecting updated estimates.

Specifically, the 5-star analyst raised his 2026 and 2027 earnings per share estimates to $31.42 and $23.07 from $29.42 and $21.06, respectively, while leaving his 2028 earnings per share estimate unchanged at $20.37. Mehta made these revisions based on several factors, including updated commodity price assumptions and changes in refining capture rates.

Despite the strong year-to-date rally in VLO shares, Mehta still finds it compelling due to its more positive outlook on refining. Additionally, the analyst also sees the possibility of solid estimate revisions that could push the stock higher. He believes Valero is well positioned to benefit from improving refining market conditions due to its strong position on the Gulf Coast, strong balance sheet strength and low-cost operations.

“Additionally, we believe the company’s premium asset portfolio and crude oil option will support capture rates and stronger cash flow generation in the near term, ultimately supporting shareholder returns,” Mehta said.

Mehta is ranked 742nd out of more than 12,300 analysts tracked by TipRanks. Their ratings were profitable 59% of the time, with an average return of 10.2%. See Valero Energy Statistics on TipRanks.

ovintiv

We switch to Ovintiv (OVV), a North American oil and natural gas producer. It has strong positions in the Permian and Montney, North America’s major oil basins. OVV offers a quarterly dividend of 30 cents per share or an annual dividend of $1.20 per share; This means a return of 2.3%.

Following meetings with management, RBC Capital analyst Gregory Pardy reaffirmed his buy rating on Ovintiv shares. price target $70He highlighted that the stock is on RBC’s Global Energy Best Ideas List.

“In our view, Ovintiv’s depth of Montney position, well-organized portfolio, strong balance sheet and growing shareholder returns provide investors with an attractive valuation re-rating opportunity over time,” Pardy said.

The 5-star analyst noted that his discussions with management increased his confidence in the company’s outlook and the potential for a higher valuation. Pardy noted the transformation that occurred as Ovintiv expanded its portfolio from six basins (including the Uinta, Bakken and Anadarko) to two (the Montney and Permian) while increasing its inventory depth.

Pardy also noted OVV’s improved shareholder returns and solid balance sheet following the recent sale of its assets in the Anadarko Basin for $3 billion.

Pardy is ranked #169 out of more than 12,300 analysts tracked by TipRanks. It did well in the ratings 64% of the time and delivered an average return of 22.3%. Check out Ovintiv Options Trading Activity on TipRanks.