Top Wall Street analysts like these 3 dividend stocks for solid returns

The Federal Reserve indicated the possibility of a rate hike this year after its latest meeting, which could have implications for income-seeking investors.

Given this backdrop, dividend-paying stocks with strong yields and upside potential could help investors earn attractive returns.

Backed by solid research, top Wall Street analysts can provide key insights to pick stocks having the ability to generate compelling capital appreciation and pay consistent dividends, driven by solid fundamentals.

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

Kinetik is a midstream company operating in the Delaware basin. With a quarterly dividend of 81 cents per share (annualized dividend of $3.24 per share), KNTK stock offers a dividend yield of about 7%.

RBC Capital analyst Elvira Scotto reiterated a buy rating on Kinetik stock and increased her price target to $53 from $50, citing expected growth from the KL2 project and sour gas opportunity in New Mexico. Scotto updated her estimates to reflect Kinetik’s Q1 2026 results, with adjusted EBITDA beating estimates, driven by improved margins and Gulf Coast marketing gains that offset Waha price-related shut-ins.

The five-star analyst expects the Waha price-related shut-ins to persist until incremental takeaway capacity comes online later this year. Scotto said that Kinetik is well-positioned to capture New Mexico sour gas growth prospects when prices support activity. She sees the Northern Delaware Basin in New Mexico as a major growth opportunity for Kinetik. Scotto highlighted that Kinetik has purpose-built its system for sour gas handling, giving it an edge over new competitors that may face permitting delays of at least three years to build acid gas injection wells.

Additionally, Scotto pointed out Kinetik’s attractive capital return framework, which targets a 3.5x to 4.0x leverage ratio, 3% to 5% hike in annual dividend until dividend coverage reaches 1.6x, and opportunistic share buybacks.

“We still view KNTK as a logical takeout candidate for buyers seeking to increase equity NGL barrels and sour gas processing,” said Scotto.

Scotto ranks No. 211 among more than 12,300 analysts tracked by TipRanks. Her ratings have been successful 68% of the time, delivering an average return of 16%. See Kinetik Financials on TipRanks.

Oilfield services company SLB (SLB), formerly known as Schlumberger, is this week’s second dividend pick. The company announced a quarterly cash dividend of nearly 30 cents per share, payable on July 9. At an annualized dividend of $1.18 per share, SLB stock offers a dividend yield of 2.5%.

Recently, Goldman Sachs analyst Neil Mehta reiterated a buy rating on SLB stock with a price target of $63, saying that he believes the company is “positioned to capitalize on long-term opportunities in oilfield activity globally triggered by the ongoing disruptions and shifting supply dynamics in the Middle East.”

The five-star analyst expects SLB’s dominant position in the international oilfield services market to bolster its earnings power over the long term, supported by increased activity levels over the medium to long term.

Given management’s commentary on accelerated exploration activity in regions such as Latin America, Africa and Asia, and his expectation for accelerated final investment decisions in deepwater projects in West Africa, the Gulf of America and Brazil, Mehta expects SLB to benefit from higher services activity needed amid increasing drilling and production.

Furthermore, Mehta expects portfolio diversification from the Digital business and data center growth to drive higher earnings over the long term. Notably, the analyst expects SLB to deliver margins of about 40% in the Digital business this year, with further expansion in the years ahead.

Mehta ranks No. 626 among more than 12,300 analysts tracked by TipRanks. His ratings have been successful 60% of the time, delivering an average return of 10.7%. See SLB AI Stock Analysis on TipRanks. 

Finally, moving on to tech giant IBM (IBM). The company is increasingly focusing on quantum computing and artificial intelligence to drive future growth. At a quarterly dividend of $1.69 per share, IBM stock offers a dividend yield of 2.7%.

Following a fireside chat with Ric Lewis, senior vice president of infrastructure at IBM, Bank of America analyst Wamsi Mohan reaffirmed a buy rating on IBM stock and increased his price target to $315 from $300.

The five-star analyst noted that Lewis views IBM Infrastructure as an increasingly less cyclical and more structurally advantaged business, with AI driving additional demand across the entire technology stack rather than only in graphics processing units.

Mohan added that AI tailwinds are most evident in IBM’s Z mainframe offering, where program-to-program growth has increased from 110% several generations ago to the range of 120% to 125% in the prior cycle and roughly 135% for Z17. This acceleration is driven by AI workloads moving beyond fraud detection into inferencing areas like insurance, actuarial modeling, and transaction-level intelligence.

The analyst noted that IBM is benefiting from customers upgrading their systems and increased revenue from higher-value workloads from its existing customer base. Mohan also noted other positives like AI-led demand in IBM’s storage business and the quantum roadmap.

“Overall, the fireside reinforced that IBM’s Infrastructure business is positioned to compound through a combination of accelerating Z demand, AI-driven workload expansion, storage strength, and better monetization across a differentiated full-stack architecture,” said Mohan.

Mohan ranks No. 21 among more than 12,300 analysts tracked by TipRanks. His ratings have been successful 65% of the time, delivering an average return of 52.6%. See IBM Insider Trading Activity on TipRanks.