Dividend stocks stand out as a compelling investment choice, offering the perfect combination of steady income and long-term growth. While capital appreciation drives wealth creation over time, the consistent payout from dividends adds stability to a portfolio, particularly during periods of economic uncertainty.
In today’s evolving financial landscape, where the Federal Reserve has cut interest rates three times, the appeal of dividend stocks grows even stronger, delivering attractive yields in a low-rate environment. For investors seeking both resilience and returns, dividend stocks with robust fundamentals and reliable payout histories offer a winning formula. With this in mind, here are three dividend powerhouses that Wall Street analysts recommend snapping up early this year to lock in maximum returns.
Dividend Stock #1: Walmart
Arkansas-based Walmart (WMT) has transformed from its humble origins into a global retail powerhouse. It operates more than 10,500 stores and a sprawling network of e-commerce platforms across 19 countries, solidifying its position as an industry leader.
Valued at a market cap of around $737.5 billion, shares of this retail giant have staged an impressive performance over the past year, delivering gains of almost 74%, far outshining the broader S&P 500 Index’s ($SPX) 24.2% return over the same time frame.
On Jan. 6, the company paid its shareholders a quarterly dividend of $0.21 per share. With an impressive 51 years of consecutive dividend increases, Walmart has earned its place as a Dividend King, consistently delivering value to its shareholders. The retail giant currently offers an annualized dividend of $0.83 per share, translating to a modest yield of 0.90%. What’s even more appealing is its conservative payout ratio of just 33.07%, signaling ample room for future dividend hikes, ensuring investors can continue to reap the rewards as the company grows.
Walmart’s shares jumped 3% on Nov. 19 after the retail giant reported impressive fiscal 2025 third-quarter earnings results that beat Wall Street’s expectations. Total revenue climbed 5.5% year-over-year to $169.6 billion, well above the anticipated $166.6 billion. On top of that, adjusted EPS also soared 13.7% annually to $0.58, exceeding forecasts by a solid 9.4%, showcasing Walmart’s resilience and strong performance.
Walmart U.S. saw 5% year-over-year increase, driving significant growth in its domestic market. Walmart International also posted an 8% rise in sales, demonstrating the company’s global strength. Meanwhile, Sam’s Club continued its momentum with a 3.9% annual boost in net sales, further showcasing Walmart’s diverse operations and its ability to deliver consistent growth across the board.
Looking forward to fiscal 2025, management anticipates net sales to grow between 4.8% and 5.1%, an improvement from earlier forecasts of 3.75% to 4.75%. At the same time, adjusted EPS is now forecast to land between $2.42 and $2.47, up from the earlier range of $2.35 to $2.43. Last month, Tigress Financial analyst Ivan Feinseth reiterated his “Buy” rating on Walmart and raised his price target to $115 from $86.
The analyst highlighted the company’s growing market share in the U.S., especially in groceries and general merchandise, as well as its appeal to upper-income families. Feinseth also praised Walmart's use of generative artificial intelligence (AI) to improve the shopping experience, noting its AI-powered shopping assistant in the beta phase.
The analyst further emphasized Walmart’s continued success in e-commerce, growing brand equity, and the rise in Walmart+ memberships, along with robust advertising growth. With these strengths in play, Feinseth sees significant upside potential in the stock, noting that Walmart continues to reward shareholders with regular dividend increases and share repurchases.
Overall, Wall Street appears highly bullish about WMT stock, with a consensus “Strong Buy” rating. Of the 36 analysts offering recommendations, 29 advise a “Strong Buy,” four recommend a “Moderate Buy,” and the remaining three suggest a “Hold.”
The average analyst price target of $99.02 indicates 7.9% potential upside from the current price levels, while Tigress Financial’s Street-high price target of $115 suggests that WMT could rally as much as 25.3% from here.
Dividend Stock #2: Ares Management Corporation
California-based Ares Management Corporation (ARES) offers a broad range of primary and secondary solutions across credit, real estate, private equity, and infrastructure. With a mission to provide flexible capital that supports businesses and drives value for stakeholders and communities, Ares excels at navigating market cycles.
As of Sept. 30, 2024, the company had $464 billion in assets under management (AUM), with a team of over 3,100 employees across North America, Europe, Asia Pacific, and the Middle East. With a market cap of roughly $57.1 billion, shares of this asset management firm have outshined the broader market in 2024, posting gains of around 53.3%.
On Dec. 31, Ares Management rewarded its shareholders with a quarterly dividend of $0.93 per share, bringing its annualized dividend to an attractive $3.72 per share. This translates to a 2.04% yield, offering investors a reliable income stream alongside the company’s growth potential. Ares Management dropped its Q3 earnings results in early November, reporting a notable 68.3% year-over-year growth in total revenue, which hit approximately $1.1 billion. Meanwhile, the company’s adjusted EPS of $0.95 slightly surpassed Wall Street’s expectations.
CEO Michael Arougheti expressed confidence in the company’s strong Q3 performance, highlighting continued momentum in fundraising, increased deployment, and solid fund performance. With year-over-year growth across key financial metrics ranging from the high teens to over 20%, Arougheti noted heightened demand for Ares' alternative strategies across all distribution channels.
With a record amount of available capital, including over $85 billion in AUM that is not yet generating fees, management emphasized that Ares is well-positioned to drive significant earnings growth in the future. As for analysts, in December, RBC Capital analyst Kenneth Lee raised his price target for Ares to $205 from $185, reaffirming his “Buy” rating and naming Ares his "favorite name" in the U.S. asset management sector as it dominates the private credit space.
With the company well-positioned to benefit from positive trends in private wealth and global infrastructure markets, Lee’s optimistic outlook also reflects improved macro conditions and the potential for lower corporate taxes under President-elect Donald Trump’s administration. Lee’s bullish stance is also supported by Ares’ fundraising momentum, asset-light model, and high return-on-equity, positioning the company for sustained growth.
ARES stock has a consensus “Moderate Buy” rating overall. Out of the 17 analysts covering the stock, eight recommend a “Strong Buy,” two advocate “Moderate Buy,” and the remaining seven give a “Hold” rating.
The average analyst price target of $185.20 indicates marginal potential upside from the current price levels. However, the Street-high price target of $227 suggests that ARES could rally as much as 24.5%.
Dividend Stock #3: Gaming and Leisure Properties
Pennsylvania-based Gaming and Leisure Properties (GLPI) specializes in acquiring, financing, and owning real estate that is leased to gaming operators through triple-net lease agreements. Under these arrangements, the tenant assumes responsibility for all aspects of the property, including maintenance, insurance, property taxes, and utilities, as well as any services necessary for the operation of the business on the leased premises.
This model ensures a streamlined, hands-off investment for GLPI while providing tenants with the flexibility to manage their properties efficiently. Presently valued at a market cap of almost $12.9 billion, shares of this REIT are in negative territory over the past year, posting a decline of 4%.
On Dec. 20, GLPI distributed to its investors a quarterly dividend of $0.76 per share. The company’s annualized dividend of $3.04 per share offers a highly enticing yield of 6.53%, making it an attractive option for income-seeking investors.
On Oct. 24, GLPI released its Q3 earnings results, reporting a 7.1% year-over-year increase in total revenue, reaching $385.3 million. The company also saw a 3.4% annual rise in adjusted funds from operations (AFFO) per share to $0.95, reflecting the strategic growth of its property portfolio, favorable rent escalations, and a strong focus on maintaining liquidity and managing its capital structure efficiently.
During the quarter, the company marked two notable achievements. It finalized the $250 million acquisition of land for Bally’s (BALY) permanent Chicago Casino, immediately securing an annual rent of $20 million. In addition, the company bolstered its growth strategy by securing a $110 million delayed draw-term loan with the Ione Band of Miwok Indians, fueling the development of an exciting new casino project near Sacramento, further solidifying its long-term potential in the gaming industry.
Last year, RBC Capital analyst Brad Heffern included GLPI in the firm’s prestigious “Top 30 Global Ideas” list, affirming his bullish outlook with a “Buy” rating and a price target of $57. Heffern’s confidence is rooted in GLPI’s $2 billion investment pipeline, which is poised to drive substantial future growth.
Given that the capitalization rates for many of these deals were negotiated during a higher-rate environment, Heffern anticipates that if rates continue to decline, gaming capitalization rates could remain “sticky,” allowing GLPI to sustain higher spreads compared to other net-lease sectors.
Heffern also pointed to GLPI’s strong balance sheet, the likelihood of an improved credit rating, and its attractive valuation, which is driven by high-quality cash flows, all of which support a promising future for investors.
Overall, Wall Street remains optimistic about GLPI stock, with a consensus “Moderate Buy” rating. Of the 20 analysts offering recommendations, 10 advise a “Strong Buy,” three give a “Moderate Buy,” six recommend “Hold,” and the remaining one suggests a “Moderate Sell.”
The average analyst price target of $54.76 indicates 17.5% potential upside from the current price levels, while the Street-high price target of $61 suggests that GLPI could rally as much as 31% from here.
