Dividend stocks are a favorite among investors for good reason. They provide a steady income stream of passive income and offer a promising avenue for total return. Total return, a comprehensive measure of investment performance, encompasses interest, capital gains, dividends, and distributions realized over time.

In simpler terms, it is the sum of income and stock appreciation. Dividend stocks can boost investment success by delivering regular income and capital appreciation.

Many across Wall Street feel that quality dividend stocks will be back in favor in 2025, and they cite two reasons for the change:

• As interest rates continue to fall over 2025, the yields on BBB and better-rated corporate bonds will also fall, making them less attractive passive income options.
• Technology stocks that have led the charge higher for the past two years are expensive, and most do not pay dividends.

We screened our 24/7 Wall St. high-yield dividend stock database, looking for quality stocks that pay at least a 5% dividend. Five top companies hit our screens, all rated Buy at top Wall Street firms we cover. They all have the potential to deliver positive total returns and dependable passive income.

Why do we cover dividend stocks?

Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.

AES

This conservative utility stock offers a hefty 5.3% dividend and considerable upside potential. AES Corp. (NYSE: AES) and its subsidiaries operate as a diversified power generation and utility company in the United States and internationally.

The company owns and operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries; owns and operates utilities to generate or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market.

It uses various fuels and technologies to generate electricity, such as:

• Coal
• Gas
• Hydro
• Wind
• Solar
• Biomass
• Renewables, comprising energy storage and landfill gas

The company owns or operates a generation portfolio of approximately 34,596 megawatts and distributes power to 2.6 million customers.

Barclays has an Overweight rating on the shares and a massive $23 price target.

Enterprise Products Partners

This company is one of the largest publicly traded energy partnerships and pays a 6.40% dividend. Enterprise Products Partners L.P. (NYSE: EPD) provides various midstream energy services, including:

• Gathering
• Processing
• Transporting and storing natural gas, natural gas liquids (NGL) fractionation
• Import and export terminalling
• Offshore production platform services

The company has four reportable business segments:

• Natural Gas Pipelines and Services
• NGL Pipelines and Services
• Petrochemical Services
• Crude Oil Pipelines and Services

Many top Wall Street analysts may like the stock because of its distribution coverage ratio, which is well above 1x. This makes the company relatively less risky in the MLP sector.

Royal Bank of Canada has an Outperform rating to go with a $36 price target,

Pfizer

This top pharmaceutical stock was a massive winner in the COVID-19 vaccine sweepstakes but has been beaten down over the past three years as many are not getting boosters. Pfizer Inc. (NYSE: PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide and pays a hefty 6.53% dividend, which has risen yearly for the past 14 years.

The company offers medicines and vaccines in various therapeutic areas, including:

• Cardiovascular metabolic and women’s health under the Premarin family and Eliquis brands
• Biologics, small molecules, immunotherapies, and biosimilars under the Ibrance, Xtandi, Sutent, Inlyta, Retacrit, Lorbrena, and Braftovi brands
• Sterile injectable and anti-infective medicines and oral COVID-19 treatment under the Sulperazon, Medrol, Zavicefta, Zithromax, Vfend, Panzyga, and Paxlovid brands

Pfizer also provides medicines and vaccines in various therapeutic areas, such as:

• Pneumococcal disease, meningococcal disease, tick-borne encephalitis
• COVID-19 under the Comirnaty/BNT162b2, Nimenrix, FSME/IMMUN-TicoVac, Trumenba, and the Prevnar family brands
• Biosimilars for chronic immune and inflammatory diseases under the Xeljanz, Enbrel, Inflectra, Eucrisa/Staquis, and Cibinqo brands
• Amyloidosis, hemophilia, and endocrine diseases under the Vyndaqel/Vyndamax, BeneFIX, and Genotropin brands

Trading not far from its lowest split-adjusted level in 13 years, the stock is an incredible bargain at current levels and pays a massive dividend.

Cantor Fitzgerald has an Overweight rating with a $45 target.

UPS

With the explosion of internet commerce, this company has enormous growth potential and offers a rich 5.19% dividend. United Parcel Service Inc. (NYSE: UPS) is a package delivery company that provides transportation and delivery, distribution, contract logistics, ocean freight, air freight, customs brokerage, and insurance services. It operates through two segments.

The U.S. Domestic Package segment offers time-definite delivery of letters, documents, small packages, and palletized freight through air and ground services in the United States.

The International Package segment provides guaranteed-day and time-definite international shipping services, comprising guaranteed-time-definite express options in:

• Europe
• Asia
• the Indian subcontinent
• the Middle East
• Africa
• Canada
• Latin America

UPS is not just a package delivery company. It also provides diverse services, including international air and ocean freight forwarding, post-sales, and mail and consulting services.

Furthermore, it offers:

• Truckload brokerage services
• Supply chain solutions to the healthcare and life sciences industries
• Financial and information services
• Fulfillment and transportation management services

This broad portfolio of services ensures the company’s stability and potential for growth, making it an attractive investment option.

Citigroup has a Buy rating with a $158 target price.

VICI Properties

This is one of the top picks across Wall Street in the net lease group and is ideal for more conservative investors looking for gaming exposure and a solid 5.47% dividend. VICI Properties Inc. (NYSE: VICI) is an S&P 500 experiential real estate investment trust with one of the largest portfolios of market-leading gaming, hospitality, and entertainment destinations, including three iconic entertainment facilities on the Las Vegas Strip:

• Caesars Palace Las Vegas
• MGM Grand
• The Venetian Resort Las Vegas

VICI Properties owns 93 experiential assets across a geographically diverse portfolio of 54 gaming properties and 39 other experiential properties across the United States and Canada. The portfolio comprises approximately 127 million square feet and features approximately 60,300 hotel rooms and over 500 restaurants, bars, nightclubs, and sportsbooks.

Its properties are occupied by industry-leading gaming, leisure, and hospitality operators under long-term, triple-net lease agreements.

VICI Properties has a growing array of real estate and financing partnerships with leading operators in other experiential sectors
including:

• Bowlero
• Cabot
• Canyon Ranch
• Chelsea Piers
• Great Wolf Resorts
• Homefield
• Kalahari Resorts

VICI Properties also owns four championship golf courses and 33 acres of undeveloped and underdeveloped land adjacent to the Las Vegas Strip.

Evercore ISI has an Outperform rating with a $36 target price.

Goldman Sachs Loves These 5 Large-Cap Technology Giants for 2025

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