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

The U.S. Federal Reserve cut key interest rates by 25 basis points, lowering borrowing costs for the third time in 2025. Given the lower interest rate backdrop (which reduces the appeal of fixed-income investments) and a volatile stock market, some investors might want to consider adding dividend stocks to their portfolios to ensure stable income and enhance overall returns.

The stock picks of top Wall Street analysts can help investors select attractive dividend-paying companies.

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

This week’s first dividend pick is Devon Energy (DVN), 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 repurchases and dividends. The company’s fixed quarterly dividend of $0.24 per share (annualized dividend of $0.96 per share) indicates a yield of 2.5%.

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

Jayaram explained that his rating upgrade was based on DVN’s compelling valuation compared to its peers, supported by free cash flow gains from the company’s $1 billion business optimization plan. The 5 star analyst noted that Devon achieved about 60% of its $1 billion goal in a little over half a year following the plan’s formal rollout.

The analyst noted that Devon’s Delaware Basin well productivity was adversely impacted by the company’s focus on completing a higher proportion of Wolfcamp B wells. That said, Jayaram expects well productivity to be stable in 2026 and 2027 due to a “steadier mix of secondary zones” compared to 2025.

Overall, Jayaram is bullish on Devon, given that it has a top-quality acreage position in the most important parts of the Delaware Basin, Bakken, and Eagle Ford shale regions. Moreover, the company 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 large inventory of lower-risk, high rate-of-return development drilling opportunities that are critical given the depleting nature of an E&P’s asset base,” said Jayaram.

Jayaram ranks No. 655 among more than 10,100 analysts tracked by TipRanks. His ratings have been profitable 59% of the time, delivering an average return of 10.3%. See Devon Energy Statistics on TipRanks. 

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

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

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

Notably, Sorbara highlighted EOG’s commitment to return 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 free cash flow based on its balance sheet strength.

The 5-star analyst also noted EOG’s efforts to leverage advanced technology to capture further opportunities in the Delaware Basin, with the company now identifying more than nine different development targets. Among other positives, Sorbara also mentioned that EOG is tracking ahead of its target for the first year with regard to the $150 million synergies from its Encino acquisition. More savings are expected from factors like improved infrastructure, production efficiency, and marketing deals through EOG’s midstream network.

Sorbara ranks No. 225 among more than 10,100 analysts tracked by TipRanks. His ratings have been successful 61% of the time, delivering an average return of 18.4%. See EOG Resources Ownership Structure on TipRanks. 

Finally, let’s look at pharmacy chain CVS Health (CVS). The company’s turnaround efforts are helping it drive improved performance in a challenging business backdrop. At its Investor Day event on December 9, CVS Health provided positive updates and stated that it expects to achieve a mid-teens adjusted earnings per share (EPS) compound annual growth rate (CAGR) through 2028. At a quarterly dividend of $0.665 per share (annualized dividend of $2.66 per share), CVS stock offers a yield of 3.4%.

Following Investor Day, Mizuho analyst Ann Hynes reiterated a Buy rating on CVS stock and raised her price target to $95 from $88. “CVS is our top pick in our coverage universe,” said the 5-star analyst, and cited structural improvement in retail earnings forecast as the reason for her revised price target. Interestingly, TipRanks’ AI Analyst has a “neutral” rating on CVS with a price target of $81.

Hynes noted that CVS’ mid-teens adjusted EPS CAGR target does not take into account any additional share buybacks, which she expects to take place once the company achieves its leverage targets, possibly by the end of next year.

The analyst also highlighted the company’s efforts to improve margins of the Healthcare Benefits (HCB) segment, which has been under pressure due to a continued rise in the medical loss ratio (MLR). This ratio is expected to decline by about 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 CVS’ Pharmacy and Consumer Wellness (PCW) segment outlook, with the company now expecting flat adjusted operating income growth compared to the previous guidance of a mid-single-digit decline. This improvement is driven by market share gains, a better reimbursement backdrop, and cost savings.

Hynes ranks No. 733 among more than 10,100 analysts tracked by TipRanks. Her ratings have been successful 60% of the time, delivering an average return of 8.5%. See CVS Health Options Activity on TipRanks.