Investors love dividend stocks, especially the high-yield variety, because they offer a significant income stream and have massive total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation.
Let’s take a closer look at the concept of total return. Imagine you purchase a stock at $20 that offers a 3% dividend. If the stock price rises to $22 within a year, your total return is 13%. This is calculated by adding the 10% increase in stock price to the 3% dividend.
With 2025 here, looking at the top stock picks from Wall Street’s leading firms makes sense. All the major Wall Street firms we cover here at 24/7 Wall St. have a list of the top stock picks for their institutional and retail clients to invest in. Typically, these are companies that analysts have an incredible amount of conviction in and feel strongly about their fundamentals and forward prospects. In addition, they often have good upside to the assigned price target and are bestowed with either a Buy or Overweight rating, depending on the company providing the coverage.
The research team at JPMorgan recently released their newest edition of the U.S. Analyst Focus List stock picks, which the company describes like this:
The U.S. Analyst Focus List is updated monthly. Names may be removed mid-month when a valuation target has been largely or wholly achieved, or the original rationale is no longer valid. New ideas can also be added mid-month. Analysts will publish the rationale for all mid-month changes in a research note.
We screened the list looking for JPMorgan’s top high-yield dividend stock picks, and five of our favorite companies made the list, which may be updated once more before the end of the year. All make sense for growth and income investors looking for the top ideas from the best Wall Street firms.
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.
AT&T
AT&T is the world’s fourth-largest telecommunications company in terms of revenue.
The legacy telecommunications company has been undergoing a lengthy restructuring while lowering its dividend, which still stands at 4.86% and is one of JPMorgan’s top value picks. AT&T Inc. (NYSE: T) provides worldwide telecommunications, media, and technology services. Its Communications segment offers wireless voice and data communications services.
AT&T sells through its company-owned stores, agents, and third-party retail stores:
- Handsets
- Wireless data cards
- Wireless computing devices
- Carrying cases
- Hands-free devices
AT&T also provides:
- Data
- Voice
- Security
- Cloud solutions
- Outsourcing
- Managed and professional services
- Customer premises equipment for multinational corporations, small and mid-sized businesses, and governmental and wholesale customers.
In addition, this segment offers residential customers broadband fiber and legacy telephony voice communication services.
It markets its communications services and products under:
- AT&T
- Cricket
- AT&T PREPAID
- AT&T Fiber
The company’s Latin America segment provides wireless services in Mexico and video services in Latin America. This segment markets its services and products under the AT&T and Unefon brands.
The JPMorgan’s price target for the stock is $25.
Annaly Capital Management
Annaly Capital Management is one of the largest mortgage real estate investment trusts.
This mortgage REIT has been around for years and is a top-income idea paying a huge 13.35% dividend. Annaly Capital Management Inc. (NYSE: NLY) is a diversified capital manager in mortgage finance and corporate middle-market lending.
The company invests in:
- Agency mortgage-backed securities
- Mortgage servicing rights
- Agency commercial mortgage-backed securities
- Non-agency residential mortgage assets
- Residential mortgage loans
- Credit risk transfer securities
- Corporate debts and other commercial real estate investments
JPMorgan has set a $21 price target objective.
Best Buy
Best Buy is a leading specialty retailer of consumer electronics in the United States and Canada.
Paying shareholders a strong 4.33% and heading into the prime time of year for retailers, this stock is a great idea for growth and income investors. Best Buy Co. Inc. (NYSE: BBY) sells technology products in the United States, Canada, and elsewhere.
Its stores provide computing and mobile phone products, such as:
- Desktops, notebooks, and peripherals
- Mobile phones comprising related mobile network carrier commissions; networking products; tablets covering e-readers; smartwatches
- Consumer electronics consists of digital imaging, health and fitness products, portable audio comprising headphones and portable speakers, smart home products, and home theaters, including home theater accessories, soundbars, and televisions
The company’s stores also offer appliances, such as:
- Dishwashers, laundry, ovens, refrigerators, blenders, coffee makers, vacuums, and personal care
- Entertainment products consisting of drones, peripherals, movies, and toys, as well as hardware and software, and virtual reality and other software products
- Other products include baby, food and beverage, luggage, outdoor living, and sporting goods
In addition, it provides delivery, installation, memberships, repair, set-up, technical support, and health-related and warranty-related services.
The company offers its products through stores and websites under these brands:
- Best Buy, Best Buy Ads, Best Buy Business, Best Buy Health, Buy Mobile
- CST, Current Health, Geek Squad, Lively, Magnolia, Pacific Kitchen, Home
- TechLiquidators and Yardbird
It can also be found through domain names bestbuy.com, currenthealth.com, lively.com, techliquidators.com, yardbird.com, and bestbuy.ca.
The JPMorgan price target for the shares is posted at $111.
EPR Properties
EPR Properties is a specialty REIT that invests in properties in select market segments that require unique industry knowledge.
This REIT invests in some of the most popular entertainment companies and pays a solid 7.72% dividend monthly. EPR Properties (NYSE: EPR) is a leading experiential net lease REIT specializing in select enduring experiential properties in the real estate industry.
The company focuses on real estate venues that create value by facilitating out-of-home leisure and recreation experiences where consumers spend their time and money.
EPR Properties has nearly $6.7 billion in total investments across 44 states. It adheres to rigorous underwriting and investing criteria centered on key industry, property, and tenant-level cash flow standards.
Senior management believes its focused approach provides a competitive advantage and the potential for stable and attractive returns.
The JPMorgan’s price target for the shares is set at $51.
Kenvue
Kenvue Inc. is an American consumer health company.
Spun off from Johnson & Johnson Inc. (NYSE: JNJ) last year, this potential total return home run pays a solid 3.50% dividend. Kenvue Inc. (NYSE: KVUE) is a global consumer health company.
The company operates through three segments:
- Self Care
- Skin Health and Beauty
- Essential Health
The self-care segment offers cough, cold, and allergy pain care, digestive health, smoking cessation, and other products under these brands:
- Tylenol
- Nicorette
- Zyrtec
The Skin Health and Beauty segment provides face and body care, hair care, sun care, and other products under these brands:
- Neutrogena
- Aveeno
- OGX
The Essential Health segment offers oral and baby, women’s health, and wound care products under these brands:
- Listerine
- Johnson’s
- Band-Aid
- Stayfree
The JPMorgan target price objective for the stock is posted at $25.
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