Top Wall Street analysts like these dividend stocks for solid returns

The U.S. stock market continues to be volatile due to tensions in the Middle East. Investors seeking some portfolio stability can opt for dividend-paying stocks with attractive upside potential.

Recommendations from top Wall Street analysts can help investors turn up stocks that pay dividends consistently and have the ability to generate long-term capital appreciation. Insight from these experts informs investors on their search as their ratings are backed by an in-depth analysis of macro and micro factors.

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.

Diamondback Energy

Independent oil and natural gas company Diamondback Energy (FANG) is this week’s first dividend pick. The company is focused on the exploration of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. It recently paid a base cash dividend of $1.05 per share. FANG offers a dividend yield of about 2%.

Recently, Goldman Sachs analyst Neil Mehta discussed the impact of ongoing commodity volatility on exploration and production companies. Assuming Brent and WTI at $75 and $70 per barrel, respectively, and Henry Hub natural gas at $3.75/MMBtu as his 2027-2030 normalized price average, the analyst is bullish on the prospects of Ovintiv (OVV), Permian Resources (PR), Diamondback, and FANG’s subsidiary Viper Energy (VNOM). He expects these stocks to generate an average total return of 22%.

Specifically, Mehta reiterated a buy rating on FANG stock with a price target of $216. The five-star analyst continues to view FANG as a compelling pick, given that the stock is trading at an attractive 12% average free cash flow yield on 2027 and 2028 estimates compared to the large-cap oil exploration and production peer average of 10%.

The analyst is confident about Diamondback’s ability to deliver better-than-anticipated performance in periods of strong commodity prices, supported by the company’s low-cost structure and lower capital intensity than peers.

“FANG has continued to reiterate the flexibility embedded within the company’s Permian operations, and continued progress in further taking costs out of the business,” said Mehta.

Mehta ranks No. 452 among more than 12,100 analysts tracked by TipRanks. His ratings have been successful 62% of the time, delivering an average return of 11.4%. See Diamondback Energy Statistics on TipRanks.

Crescent Energy

Another energy play in this week’s list is Crescent Energy (CRGY), an oil and gas company with operations focused in the Eagle Ford, Permian and Uinta basins. It also owns minerals and royalty interests across premier U.S. oil and natural gas basins, mainly operated by large, well-capitalized companies. With a quarterly dividend of 12 cents per share, CRGY stock offers a dividend yield of 3.5%.

Following a period of restriction and a “not rated” designation, JPMorgan analyst Zach Parham upgraded Crescent Energy to buy with a price target of $19. JPMorgan previously had a hold rating on CRGY stock with a price target of $14.

The top-rated analyst highlighted that Crescent is a diversified exploration and production company with a solid track record of creating value through acquisitions and divestitures. Specifically, Parham is impressed with Crescent’s improving capital efficiency and consolidation efforts in the Eagle Ford, with the company now emerging as the third-largest oil producer in the region.

The analyst noted that Crescent added debt to its balance sheet with its $3.1 billion Vital Energy acquisition, which helped it make its foray into the Permian, a much more competitive basin for acquisitions and diversification. It is worth noting that CRGY sold $800 million in assets before closing the Vital deal, reducing proforma net debt to about $4.8 billion. While Crescent’s near-term leverage remains high compared to peers, Parham expects the company to use its free cash flow to reduce its debt burden following the rise in strip prices due to the U.S.-Iran conflict.

Parham also observed that Crescent plans to let Vital’s output decline, which will help extend its Permian inventory life, thus addressing a major investor concern. “Over the long-term, we are confident in CRGY’s ability to manage its portfolio of E&P assets to generate value for shareholders,” concluded the analyst.

Parham ranks No. 1,067 among more than 12,100 analysts tracked by TipRanks. His ratings have been successful 66% of the time, delivering an average return of 10.2%. See Crescent Energy Ownership Structure on TipRanks. 

Darden Restaurants

Finally, we look at Darden Restaurants (DRI), which operates several popular chains, including Olive Garden, LongHorn Steakhouse and Yard House. The company recently reported its fiscal third quarter results and issued a solid outlook. Darden declared a quarterly dividend of $1.50 per share, payable on May 1. At an annualized dividend of $6 per share, DRI stock offers a dividend yield of about 3.1%.

Following the Q3 print, Mizuho analyst Nick Setyan reiterated a buy rating on Darden stock with a price target of $235. The analyst stated that despite higher inflation and general and administrative expenses, the company delivered solid fiscal third-quarter results.

Setyan noted that quarterly performance was driven by strong same-store sales growth, highlighting near- and medium-term visibility due to Darden’s scale and diversity. Also, strength in LongHorn Steakhouse’s same-store sales growth offset the weakness in Olive Garden’s (OG) performance due to the absence of price promotions for three weeks.

The five-star analyst added that the company’s better-than-expected fourth-quarter outlook is supported by strength in March’s comparable sales trends. Setyan is confident about pricing aligning with inflation in the fiscal fourth quarter, particularly at LongHorn Steakhouse, which gives more clarity on fiscal 2027 same-store sales growth and margin expectations.

“With OG beginning the cycle of lapping tougher comparisons successfully, inflation cooling versus F26, pricing accelerating modestly, and unit growth stepping up to 3%+, visibility into DRI’s longer-term EBITDA and EPS growth algorithm is as high as ever,” said Setyan.

Setyan ranks No. 729 among more than 12,100 analysts tracked by TipRanks. His ratings have been successful 53% of the time, delivering an average return of 10.6%. See Darden Restaurants Financials on TipRanks.