Investors often turn to dividend stocks as a reliable source of income and a way to potentially boost the overall performance of their portfolios. Yet, with so many publicly traded companies to choose from, selecting the most promising dividend stocks can pose a real challenge. Thankfully, insights from top analysts on Wall Street can guide investors toward companies likely to maintain robust financials and consistent dividend payouts.
Let’s delve into three dividend-paying stocks, spotlighted by Wall Street’s finest as per TipRanks, a platform that evaluates analysts based on their track records.
### McDonald’s
The renowned fast-food giant, McDonald’s (MCD), recently shared its fourth-quarter earnings, meeting market expectations. Despite this, their revenue fell short of Wall Street’s projections due to an E. coli incident impacting U.S. sales in late October. Nevertheless, the announcement day saw a rise in MCD’s stock thanks to strong international sales and optimistic forecasts for 2025. This outlook is fueled by strategic initiatives aimed at enhancing performance.
Earlier in the month, McDonald’s declared a cash dividend of $1.77 per share, scheduled for payment on March 17. With an annualized dividend per share totaling $7.08, the stock delivers a 2.3% yield. As a dividend aristocrat, McDonald’s has consistently increased its dividends for 48 quarters uninterrupted.
After their Q4 results, Jefferies analyst Andy Barish reaffirmed his buy rating for McDonald’s stock and marginally increased the price target to $349. Although the decline in Q4 2024’s U.S. same-store sales wasn’t unexpected, Barish remains optimistic about the initial 2025 performance, citing steady traffic and forward momentum as positives.
Barish is encouraged by recent trends, which suggest that McDonald’s value messaging is resonating with consumers. The McValue menu, combined with digital sales, delivery options, drive-thru enhancements, and core menu strategies, is anticipated to drive growth. Predicting U.S. same-store sales growth of 2.3% for 2025 and 2.6% for 2026, Barish highlights McDonald’s strong market positioning domestically and internationally.
Ranking at number 566 among more than 9,300 analysts tracked by TipRanks, Barish boasts a 57% success rate with an average return of 10.4%. You can view McDonald’s detailed stock charts on TipRanks.
### Ares Capital
Next up is Ares Capital (ARCC), a well-regarded business development firm specializing in financing middle-market companies. This month, Ares shared their Q4 2024 results and announced a first-quarter dividend of 48 cents per share, payable by March 31. The stock boasts a dividend yield of 8.2%.
Responding to these results, RBC Capital’s Kenneth Lee maintained a buy rating for ARCC and nudged the price target up to $24. Although the Q4 outcomes were mixed against his expectations, the net asset value per share defied expectations slightly, while the core earnings per share were slightly under.
On a brighter note, portfolio activity was stronger than anticipated, and leverage, at 1.03x, was lower than predicted due in part to raised equity capital. Lee pointed out the company’s impressive credit performance, particularly the non-accrual rate’s modest climb to 1.7%, which remains below the 2.8% historical average since the financial crisis.
Lee has adjusted his 2025 core EPS forecast to $2.10 and the 2026 estimate to $2.14, accounting for a forecasted drop in asset yields balanced against lower debt costs. Overall, Lee’s optimistic stance on ARCC stems from its robust risk management history, solid dividend backing, and scale advantages.
Lee stands out as the 15th top analyst out of over 9,300 monitored by TipRanks, with a 74% success rate and an average return of 19.1%. Ares Capital’s ownership structure is available on TipRanks for more insights.
### Energy Transfer
Finally, we have Energy Transfer (ET), a major player in the midstream energy sector with an extensively spanning pipeline infrastructure across 44 U.S. states. Despite falling short of expectations in its Q4 results and adjusted earnings, the company is planning an ambitious $5 billion investment in growth projects this year, driven by rising energy demands from data centers.
The company declared a quarterly cash distribution of $0.3250 per common unit for Q4 2024, a 3.2% year-over-year increase, offering a yield of 6.7%.
Mizuho’s Gabriel Moreen reiterated his buy rating for ET, setting the price target at $24. While the 2025 guidance miss isn’t of huge concern, Moreen places weight on the substantial capex guidance, which stands above the usual $2.5 to $3.5 billion range. He views the elevated spending positively, pointing out that funds will support projects within Energy Transfer’s expertise.
Even with conservative adjusted EBITDA guidance for 2025, Moreen believes the company’s optimization strength can foster earnings growth. He remains optimistic about Energy Transfer’s potential, foreseeing its capex leading to earnings growth beyond 2026.
Within the analyst community, Moreen ranks at number 62 out of more than 9,300 according to TipRanks, with an impressive 78% success rate and an average return of 16.4%. For those interested, Energy Transfer’s insider trading activity can be reviewed on TipRanks.
