How would you like to get paid to sit back and watch a stock you own take off? That's a scenario most investors would love. But is it unrealistic? Nope, not with the right dividend stocks. Analysts might have found just the stocks to buy, too. Here are three high-yield dividend stocks Wall Street thinks will soar 41% or more in 2025.
1. AES
AES (AES 0.20%) ranks as the top seller of renewable power to corporate customers and operates two of the fastest-growing utilities in the U.S. The company owns hydroelectric, solar, and wind power-generation facilities, as well as natural gas, coal, and pet-coke or oil facilities.
NYSE: AES
Key Data Points
Although AES' share price has fallen almost 60% from its peak in late 2022, Wall Street expects a rebound. The average analysts' 12-month price target reflects an upside potential of 47%. Granted, not every analyst is bullish about AES. However, in a January survey by LSEG, 11 of the 16 analysts who cover AES recommended the stock as a "buy" or a "strong buy."
This utility stock offers an attractive forward dividend yield of 5.68%. AES has increased its dividend for 12 consecutive years, most recently announcing a 2% dividend hike last month. It also boasts a healthy payout ratio of 47.5%.
2. CVS Health
You're probably already at least somewhat familiar with CVS Health (CVS +0.91%). The company is one of the biggest pharmacy retailers in the U.S. Its CVS Caremark unit is one of the leading pharmacy benefit managers (PBMs). CVS Health also owns Aetna, one of the largest health insurers.
NYSE: CVS
Key Data Points
As was the case with AES, CVS Health's share price has plunged almost 60% below its high. But Wall Street likes this stock going forward. The average 12-month price target is 41% above CVS' current share price. Eighteen of the 28 analysts surveyed by LSEG in January rated the stock a "buy" or a "strong buy." The other 10 analysts recommended holding CVS.
CVS Health had an impressive streak of dividend increases before it acquired Aetna in 2018. After holding its dividend steady for a few years, the company began increasing the payout again in 2022. Its forward dividend yield now stands at 5.78%.
3. Devon Energy
Devon Energy (DVN +1.86%) is one of the largest U.S. oil and gas producers. It operates in multiple areas in the U.S., with significant production capabilities in the Delaware Basin located in West Texas and Southeastern New Mexico.
NYSE: DVN
Key Data Points
After a huge run-up following the COVID-19 pandemic bottom for oil prices in 2020, Devon's share price has given up much of its gains. However, the consensus on Wall Street is that the stock could return to its winning ways over the next 12 months. The average price target for Devon reflects an upside potential of 42%. Of the 31 analysts surveyed by LSEG in January, 20 rated the stock a "buy" or a "strong buy," with the others recommending it as a "hold."
Devon's dividend consists of two parts: a fixed component and a variable component that fluctuates based on excess free cash flow. Its forward dividend yield is 4.13% now but could easily move higher if oil prices rise.
Is Wall Street right about these stocks?
These high-yield dividend stocks could reach Wall Street's price targets over the next 12 months. However, I wouldn't bet the farm on it.
Federal government policies related to renewable energy may not be as favorable for AES with the incoming Trump administration. CVS Health's Aetna unit continues to face challenges while politicians from both major parties remain skeptical about PBMs. Devon could benefit from a relaxed regulatory environment, but if domestic oil and gas production increases, it could drive down fossil fuel prices and negatively affect Devon's share price.
That said, income investors could like all three of these stocks. Their dividends appear to be safe -- and they're certainly juicy.
