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

The US Federal Reserve has cut key interest rates by 25 basis points, lowering borrowing costs for the third time in 2025. Given low interest rates (which reduce the attractiveness of fixed income investments) and a volatile stock market, some investors may want to consider adding dividend stocks to their portfolios to ensure stable income and enhance overall returns.

Top Wall Street analysts’ picks can help investors pick attractive companies that pay dividends.

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.

The first dividend of the week 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 constant quarterly dividend of $0.24 per share (annual dividend of $0.96 per share) suggests a yield of 2.5%.

Recently, JP Morgan analyst Arun Jayaram upgraded Devon Energy shares to buy from hold, despite lowering the stock price. Target price is $44 From $49. The 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 improvement plan. The five-star analyst noted that Devon achieved about 60% of its $1 billion target in just over half a year after the plan’s formal rollout.

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

Overall, Jayaram is bullish on Devon, since it has a high-quality position in the most important parts of the Delaware Basin, Bakken and Eagle Ford shale regions. Furthermore, the company has the option to expand into the STACK and Powder River basins.

“We believe DVN’s core concession assets have the potential to provide a significant inventory of low-risk, high-return development drilling opportunities that are critical given the depleted nature of the E&P asset base,” Jayaram said.

Jayaram is ranked No. 655 out of more than 10,100 analysts tracked by TipRanks. Its reviews were profitable 59% of the time, generating 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 United States and Trinidad. In the third quarter of 2025, EOG paid $545 million in regular dividends and repurchased shares worth $440 million. Last month, EOG declared a quarterly dividend of $1.02 per share, payable on January 30, 2026. With an annual dividend of $4.08, EOG yields 3.7%.

Gabriel Sorbara, an analyst at Seibert Williams Shank, reiterated a Buy rating on EOG shares at Target price $150. The stock also received an “Outperform” rating from TipRanks AI analyst, with a price target of $127.

Sorbara views EOG as a “premium” large-cap company with the ability to navigate through commodity cycles, supported by its strong balance sheet and strong stock. The analyst also pointed to the company’s tremendous free cash flow generation capabilities.

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

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

Sorbara is ranked No. 225 out of more than 10,100 analysts tracked by TipRanks. His evaluations were successful 61% of the time, and he achieved an average return of 18.4%. See EOG Resources Ownership Structure on TipRanks.

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

Following the Investor Day, Mizuho analyst Anne Haynes reiterated and raised her buy rating on CVS stock Target price is $95 From $88. “CVS is our top pick in our coverage universe,” the five-star analyst said, citing a structural improvement in the retail earnings outlook as a reason for the revised price target. Interestingly, the AI ​​analyst at TipRanks has a “Neutral” rating on CVS with a price target of $81.

Hines noted that CVS’s adjusted CAGR target in the mid-teens does not take into account any additional stock buybacks, which it expects to take place once the company meets its leverage targets, perhaps by the end of next year.

The analyst also highlighted the company’s efforts to improve margins in its Healthcare Benefits (HCB) segment, which has been under pressure due to a persistent rise in its medical loss ratio (MLR). This ratio is expected to decline by approximately 50 basis points in 2026 due to better pricing, lower benefits under Medicare Advantage (MA) plans, and the company’s decision to exit the health insurance exchange (HIX) business.

Hines also noted the improvement in the outlook for CVS’s Pharmacy and Consumer Wellness (PCW) segment, with the company now expecting flat growth in adjusted operating income compared to previous guidance of a low-single-digit average. This improvement is due to market share gains, better reimbursement background, and cost savings.

Hynes is ranked No. 733 out of more than 10,100 analysts tracked by TipRanks. Their evaluations were successful 60% of the time, generating an average return of 8.5%. See CVS Health Options activity on TipRanks.