Equity shares remain a popular choice for investors looking for steady income and high portfolio returns. However, with thousands of dividend-paying companies to choose from, identifying the right stocks can be a challenge.
In this regard, recommendations from top Wall Street analysts can provide useful insights and help identify the benefits of stocks supported by strong fundamentals and high attractive potential.
Here are three dividend-paying stocks highlighted by top Wall Street experts, as tracked by TipRanks, a platform that ranks analysts based on their past performance.
Permian Resources
A private oil and natural gas company Permian Resources (PR) is this week’s first budget stock. The company recently paid a quarterly dividend of 16 cents per share. It paid a dividend of 64 cents per share last term and an annual yield of 3.5%.
Recently, Evercore analyst Chris Baker initiated coverage on Permian Resources stock with a price target of $25. The analyst believes that the company is in a good position to benefit from improving demand for US shale after the Iran conflict, due to its small inventory that can increase the growth of free cash flow. Baker also noted the disciplinary integration of PR in the Permian Basin.
In addition, the 5-star analyst highlighted the company’s focus on one area and efficient capital allocation by management across expansion efforts, strategic acquisitions, and share buybacks. Baker noted that management is focusing on investments in the high-return Northern Delaware Basin, which helps increase profitability.
“A key part of our work here, and the reason why we think PR deserves a lot of attention relative to limited or volatile shale stories, is that PR runs a discovery and exploitation model,” Baker said.
He explained that Permian Resources deserves a premium valuation as it continues to find and develop new high-quality assets instead of relying on limited inventory, a strategy the market appreciates less.
Baker is ranked No. 862 among more than 12,300 analysts tracked by TipRanks. His predictions were successful 75% of the time, yielding an average return of 48.3%. See Permian Resources Ownership Structure on TipRanks.
Valero Energy
Valero Energy (VLO) is a producer and marketer of petroleum-based and low-carbon transportation fuels and petrochemical products. It paid a dividend of $1.20 per share last time and has an annual yield of 4.80%.
Ahead of Valero’s second-quarter earnings on July 30, Goldman Sachs analyst Neil Mehta reiterated a buy rating on VLO stock and raised his price target to $286 from $283 to reflect the revised ratings.
Specifically, the 5-star analyst raised its 2026 and 2027 earnings per share estimates to $31.42 and $23.07 from $29.42 and $21.06, respectively, while leaving its 2028 EPS estimate unchanged at $20.37. Mehta makes these revisions based on several factors, including revised asset price assumptions and changes in refining capture rates.
Despite a strong year-to-date rally in VLO stock, Mehta still finds it compelling due to his positive outlook on refining. In addition, the analyst sees the possibility of a strong revision of the rating, which could propel the stock forward. He believes Valero is well-positioned to benefit from improving market conditions due to its strong position in the Gulf Coast, strong balance sheet, and cost-effective operations.
“Additionally, we believe the company’s prime asset portfolio and crude slate selection should support capture rates and strong cash flow generation in the near term, ultimately supporting shareholder returns,” Mehta said.
Mehta is ranked No. 742 among more than 12,300 analysts tracked by TipRanks. His estimates were profitable 59% of the time, yielding an average return of 10.2%. See Valero Energy Statistics on TipRanks.
Ovintiv
Moving on to Ovintiv (OVV), a North American oil and natural gas producer. It has strong positions in the leading oil basins in North America – Permian and Montney. It paid a dividend of 30 cents per share last term and has an annual yield of 1.20%.
After meetings with management, RBC Capital analyst Gregory Pardy reaffirmed a buy rating on Ovintiv stock with a target price of $70, highlighting that the stock is on RBC Global’s Best Opinion list.
“In our view, Ovintiv’s depth in Montney’s position, structured portfolio, strong balance sheet and enhanced shareholder returns provide investors with an attractive opportunity to rebalance over time,” Pardy said.
The 5-star analyst said his meetings with management strengthened his confidence in the company’s vision and potential to achieve higher ratings. Pardy noted Ovintiv’s transformation, with the company optimizing its portfolio from six basins (including the Uinta, Bakken and Anadarko) to two – the Montney and Permian – while improving the depth of its inventory.
Pardy also emphasized OVV’s improved shareholder returns and strong balance sheet following the recent sale of its holdings in the Anadarko Basin for $3 billion.
Pardy is ranked No. 169 among more than 12,300 analysts tracked by TipRanks. His predictions were successful 64% of the time, yielding an average return of 22.3%. Check out Ovintiv Options Trading Activity on TipRanks.
