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Talk around tariffs, the emergence of China’s DeepSeek and earnings of key companies have put the stock market on a roller-coaster ride. Investors seeking stable returns may consider adding dividend stocks to their portfolios.
Given the vast universe of dividend-paying stocks, it can be difficult to select the right one. To this end, investors can benefit from tracking the stock picks of top Wall Street analysts, whose recommendations are based on in-depth analyses of a company’s financials and growth prospects.
Here are three dividend-paying stocks, highlighted by Wall Street’s top pros on TipRanks, a platform that ranks analysts based on their past performance.
International Business Machines (IBM)
This week’s first dividend stock is tech giant IBM (IBM). The company impressed investors with its market-beating fourth-quarter earnings. Notably, IBM’s Software segment’s performance reflected solid demand for artificial intelligence (AI) and the Red Hat Linux operating system.
The company returned $1.5 billion to shareholders via dividends in the fourth quarter. IBM has a dividend yield of 2.6%.
In reaction to the results, Evercore analyst Amit Daryanani raised the price target for IBM stock to $275 from $240 and reiterated a buy rating. The analyst highlighted that the Q4 revenue growth was driven by continued acceleration in IBM’s Software business growth, which helped offset the weakness in the Consulting and Infrastructure segments.
“We think the print highlighted IBM’s unique position across both Software and Consulting segments that are starting to inflect higher with AI and potential M&A being incremental upside catalysts,” said Daryanani.
The analyst noted that despite flattish trends in the fourth quarter, the company expects the Consulting segment’s performance to improve in 2025, driven by higher IT spending and the conversion of the $5 billion of AI signings to revenues.
Daryanani further added that during the December quarter, IBM’s shareholder returns comprised only dividends and no share repurchases. He highlighted that the company is committed to a consistent and growing dividend. He expects IBM to allocate more capital to mergers and acquisitions rather than share repurchases.
Daryanani ranks No. 244 among more than 9,300 analysts tracked by TipRanks. His ratings have been successful 61% of the time, delivering an average return of 14%. See IBM Stock Charts on TipRanks.
Verizon
The next dividend pick is telecom giant Verizon Communications (VZ). The company posted strong results for the fourth quarter of 2024 and achieved the best quarterly postpaid phone gross additions in five years. On Feb. 3, Verizon paid a quarterly dividend of just over 67 cents per share. VZ stock offers a dividend yield of 6.8%.
Recently, Tigress Financial analyst Ivan Feinseth reiterated a buy rating on Verizon stock with a price target of $55. The analyst highlighted that a reacceleration in mobile and broadband subscriber growth is fueling the company’s revenue and cash flow.
Feinseth thinks that Verizon will continue to gain from robust 5G adoption and increasing services revenue growth. He also thinks that the company is well-positioned to benefit from AI-led growth in mobile edge computing. The analyst noted that Verizon has a solid track record of developing and integrating AI enhancements across its network and is in the process of integrating several generative AI initiatives.
“5G and margin expansion combined with AI-driven network optimization and operating efficiency expansion is driving a re-acceleration in Business Performance trends,” said Feinseth.
The analyst also expects Verizon’s expansion into emerging technologies, like autonomous vehicle connectivity, smart city infrastructure and remote health-care solutions, to drive further growth. Moreover, Feinseth thinks that VZ’s above-average dividend yield makes it a compelling pick. He pointed out that the company has hiked its dividend every year for the past 18 years.
Feinseth ranks No. 169 among more than 9,300 analysts tracked by TipRanks. His ratings have been profitable 62% of the time, delivering an average return of 15%. See Verizon Insider Trading Activity on TipRanks.
EPR Properties
Another attractive dividend stock is EPR Properties (EPR), a real estate investment trust (REIT) that is focused on experiential properties such as movie theaters, amusement parks, eat-and-play centers and ski resorts. EPR offers a dividend yield of 7.2%.
After the company hosted a multi-city non-deal road show, RBC Capital analyst Michael Carroll reiterated a buy rating on EPR stock with a price target of $50. The analyst stated that management “highlighted an attractive story supported by a healthy tenant base, recovering box office, and a pragmatic investment approach.”
Carroll noted that consumers have been resilient following the Covid-19 pandemic and continue to give importance to experiences, thus benefiting EPR due to its focus on experiential properties. Also, management noted that the mid- to high-end customers, who are its tenants’ major clients, continue to be healthy and are visiting its properties.
The analyst added that EPR expects to gain from a rebound in box office in 2025. The company expects 110-115 wide releases by studios in 2025 and more than 120 in 2026, compared to only 95 in 2024.
Carroll is also bullish on EPR stock due to its lucrative dividend yield of more than 7%, which it expects to grow at the rate of 3% to 5% per year. At a multiple of an estimated 9.0-times forward adjusted funds from operations, the analyst finds EPR’s valuation attractive.
Carroll ranks No. 886 among more than 9,300 analysts tracked by TipRanks. His ratings have been successful 61% of the time, delivering an average return of 7.5%. See EPR Properties Ownership Structure on TipRanks.