For years, Miller Lite ran ads that featured the line "Tastes great. Less filling." Having it all appealed to beer drinkers. 

That general idea is attractive to income investors, too. They're accustomed to buying stocks that pay solid dividends but don't deliver much in the way of growth. But they'd love to have it all -- great dividends and significant share price appreciation.

Analysts believe that income investors just might be able to have it all. This dividend stock offers an ultra-high yield of 9.1% -- and Wall Street thinks the stock can soar 32% higher.

Striking a gusher

The average analysts' 12-month price target for Devon Energy (DVN 0.13%) reflects an upside potential of close to 32%. Of the 32 analysts surveyed by Refinitiv in May, 10 rate the oil stock as a "strong buy" with 13 rating the stock as a "buy." None recommend selling Devon. 

Devon is an independent oil and gas company that focuses on U.S. onshore drilling. It produced a record-high 320,000 barrels of oil per day in the first quarter of 2023. 

The stock has fallen around 20% so far in 2023 due to declining oil prices. However, this performance should be put into context: Devon's share price skyrocketed 179% in 2021 and 40% in 2022.

Don't overlook that juicy dividend, either. Devon has paid a dividend every quarter for 31 consecutive years. Its dividend is so high because it consists of two parts, a fixed component and a variable component. The variable part is funded by Devon's excess free cash flow, which has been especially great over the last couple of years. 

Is Wall Street right about Devon?

Wall Street's bullish view on Devon will only be proven right if oil prices rise. But is that likely? There's reason to think so.

The U.S. benchmark for oil prices, West Texas Intermediate (WTI) crude, currently stands at close to $71 per barrel. A recent Reuters survey of oil industry analysts and economists found that the average forecast for WTI crude this year is a little over $82 per barrel -- roughly 15% higher than the current price. 

Although China's economy is growing more slowly than in the past, it's expected to expand by 5.4% in 2023. That's enough to boost the demand for energy. Meanwhile, OPEC+ countries have announced oil production cuts. The combination of increased demand with lower supply should cause oil prices to rise.

If this scenario plays out, Devon's share price will likely move higher. The company's free cash flow should also improve, enabling it to increase the variable component of its dividend.

There is one potential issue, though. Many economists think that the U.S. economy could enter a recession this year. Energy demand typically falls during recessions. This could cause Devon to fail to meet analysts' expectations. 

Have it all

My view is that Devon is a great stock for income investors to buy even if Wall Street price targets are overly optimistic. The company should be able to generate sufficient free cash flow to pay an attractive dividend, although the dividend payout admittedly could fluctuate somewhat.

I also like Devon's valuation. Its shares currently trade at close to 7x forward earnings. That's well below the energy sector average forward earnings multiple of 10.2. 

Devon's management thinks the valuation is a bargain, too. The company's board upsized its share buyback program by 50% to $3 billion. Several executives, including CEO Rick Muncrief, have bought shares in recent months.  

I suspect that oil prices won't fall much even if a recession comes. And they'll rise sooner or later, pushing Devon's share price higher. Devon offers growth potential, an ultra-high dividend, and an attractive valuation. Income investors really could have it all with this stock.