Investors love dividend stocks, especially those with high yields, because they provide a substantial income stream and offer significant 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. If you purchase a stock at $20 that pays a 3% dividend ($0.60 per share) and the price rises to $22 in a year, your total return is ($22 + $0.60 – $20) = 13%. This combines the price appreciation and the dividend received.
We constantly screen our 24/7 Wall St. passive income stock research database for the best ideas. Five stocks that many investors are very familiar with are ideal choices for growth and income investors seeking reliable dividend passive income, as well as some growth potential to keep pace with inflation. All are rated Buy at the top Wall Street firms we cover, and after some in-depth research, all of them are among the most widely recommended companies for investors to consider.
Why do we cover Wall Street’s favorite dividend stocks?
Research from Hartford Funds, which considered annualized standard deviation as a measure of return volatility, found that between December 1969 and March 2024, high-dividend portfolios achieved an annualized return of 12.3%, compared to 10.5% for mid-dividend portfolios and 9.7% for low-dividend portfolios. The respective annualized standard deviations were 14.1%, 16%, and 20.8%, indicating that higher-yield portfolios experienced lower historical risk.
American Tower
American Tower Corp. (NYSE: AMT | AMT Price Prediction) is a real estate investment trust (REIT) that owns, develops, and operates wireless and broadcast communications infrastructure. This top company is in the perfect growth arena, pays a solid recurring dividend, and has 16 Buy ratings, which is the leading consensus for a high-growth infrastructure REIT. American Tower is an independent owner, operator, and developer of multitenant communications real estate. Its portfolio includes over 224,000 communications sites and a highly interconnected footprint of U.S. data center facilities.
Its segments include:
- U.S. & Canada property
- Asia-Pacific property
- African property
- European property
- Latin American property
- Data Centers
- Services
The company’s primary business is leasing space on multitenant communications sites to wireless service providers, radio and television broadcast companies, wireless data providers, government agencies, municipalities, and tenants in several other industries.
Its data center segment relates to data center facilities and related assets it owns and operates in the United States. The Services segment offers tower-related services in the United States, including AZP, structural and mount analyses, and construction management.
The UBS price target for the Buy-rated stock is posted at $260.
Ares Capital
The company specializes in providing financing solutions for the middle market and appears poised to reach new highs, while garnering a Buy rating from 12 analysts. This company is a high-yielding business development company (BDC). Ares Capital Corp. (NASDAQ: ARCC) specializes in acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of middle-market companies.
It also provides growth capital and general refinancing. It prefers to invest in companies engaged in basic and growth manufacturing, business services, consumer products, healthcare products and services, and information technology sectors.
The fund will also consider investments in industries such as:
- Restaurants
- Retail
- Oil and gas
- Technology sectors
It focuses on investments in the Northeast, Mid-Atlantic, Southeast, and Southwest regions from its New York office, the Midwest region from the Chicago office, and the Western region from the Los Angeles office.
The fund typically invests between $20 million and $200 million, with a maximum investment of $400 million, in companies with an EBITDA between $10 million and $250 million per year. It makes debt investments between $10 million and $100 million
The fund invests through:
- Revolvers
- First-lien loans
- Warrants
- Unitranche structures
- Second-lien loans
- Mezzanine debt
- Private high yield
- Junior Capital
- Subordinated debt
- Non-control preferred and common equity.
The fund also selectively considers third-party-led senior and subordinated debt financings and opportunistically acquires stressed and discounted debt positions.
Ares Capital prefers to be an agent and lead the transactions in which it invests. The fund also seeks board representation in its portfolio companies.
Wells Fargo has an Overweight rating to go with a $23 target price.
AT&T
AT&T Inc. (NYSE: 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. Seventeen analysts give the stock a Buy rating, a sign of comprehensive Wall Street support. AT&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 provided 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.
J.P. Morgan has a Buy rating and a price target of $33.
Brookfield Infrastructure Partners
With a strong and dependable dividend and seven Buy ratings, this is an ideal buy-and-hold stock for growth and income investors. Brookfield Infrastructure Partners L.P. (NYSE: BIP) is a global infrastructure company that owns and operates long-life assets in the utilities, transport, midstream, and data sectors across the United States, Asia Pacific, and Europe.
The company’s segments include:
- Utilities
- Transport
- Midstream
- Data
The Utilities segment consists of regulated transmission (natural gas and electricity) and commercial and residential distribution (electricity, natural gas, and water connections) operations.
The Transport segment includes infrastructure assets that provide transportation, storage, and handling services for merchandise goods, commodities, and passengers. This segment consists of diversified terminals, rail, and toll roads.
The Midstream segment comprises systems that provide natural gas transmission, gathering, processing, and storage services.
The company’s Data segment includes critical infrastructure that provides telecommunication, fiber, and data storage services.
Scotiabank has an Outperform rating with a $41 target price.
Viper Energy
Viper Energy Inc. (NASDAQ: VNOM) owns and acquires mineral and royalty interests in oil and natural gas properties in the Permian Basin. With a strong dividend, this mid-cap energy play has tremendous upside to the target price of many firms. All 13 Wall Street analysts covering Viper Energy in the past three months rated it a Strong Buy, with a 12-month consensus price target indicating almost 40% upside. Viper Energy is an independent oil and natural gas company focused on the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves, primarily in the Permian Basin in West Texas.
The company owns, acquires, and exploits oil and natural gas properties in North America. Its assets consist of mineral and royalty interests in oil and natural gas properties primarily in the Permian Basin, substantially all of which are leased to working interest owners who bear the costs of operation and development.
The assets consist of mineral interests and royalty interests underlying 987,861 gross acres and 35,671 net royalty acres primarily in the Permian Basin.
Viper Energy has mineral and royalty interests located in Howard County, Texas, including approximately 1,691 net royalty acres in the Permian Basin, with an average net royalty interest of roughly 8.6%.
Piper Sandler has an Overweight rating with a huge $66 price objective.
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