In this article, we will take a look at the Top 10 High Dividend Stocks to Invest In According to Analysts.
According to a CNBC report published on May 29, dividend-paying stocks can play an important role in enhancing long-term investor returns. Morgan Stanley believes several companies may soon be in a position to begin distributing dividends, creating potential opportunities for shareholders.
Strategist Todd Castagno said in a note that companies initiating dividend payments have historically delivered “outsized returns.” Morgan Stanley’s analysis found that stocks announcing a regular quarterly dividend outperformed the broader market by an average of 650 basis points during the six months following the announcement.
The outperformance became even more pronounced over a longer period. Castagno wrote that these companies exceeded market returns by 1,000 basis points, on average, in the 12 months after announcing a dividend. One basis point equals 0.01%.
Those gains come on top of the long-term benefits investors may receive when dividends are reinvested and allowed to compound over time. He made the following remark:
“Most dividend initiating companies start their payments at a 2.0% yield, on average, with the highest initial yields coming from Consumer Staples, Utilities, and Energy sectors and the lowest yields in Information Technology, Industrials, and Consumer Discretionary.”
Given this, we will take a look at some of the best dividend stocks with high yields.
Photo by Annie Spratt on Unsplash
Our Methodology:
For this list, we screened for dividend companies with yields above 3%, as of May 29. From that list, we identified stocks with upside potential of at least 10%. We finally picked companies that have recently reported noteworthy developments likely to impact investor sentiment. The stocks are ranked according to their upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
10. Cal-Maine Foods, Inc. (NASDAQ:CALM)
Analyst Upside Potential as of May 29: 10.12%
Dividend Yield as of May 29: 6.30%
On May 12, Cal-Maine Foods, Inc. (NASDAQ:CALM) and Sara Lee Frozen Bakery, LLC, a leading manufacturer of premium frozen baked goods, announced that Cal-Maine Foods had acquired certain assets of the Van’s Foods business from Sara Lee Frozen Bakery, LLC, a Kohlberg portfolio company.
Van’s is the leading brand in gluten-free waffles and has established itself as a category leader in the rapidly growing better-for-you frozen breakfast market. The acquisition supports Cal-Maine Foods’ strategy to diversify its business, expand its prepared foods business-to-consumer (B2C) retail operations, and create greater value across the supply chain.
The addition of Van’s is expected to increase Cal-Maine Foods’ annual prepared foods sales by about 10% and boost volume by approximately 6% on a pro forma basis. The brand is expected to strengthen the company’s ability to meet changing consumer preferences while expanding its reach across grocery stores, e-commerce platforms, and other direct-to-consumer channels.
Van’s competes in the fast-growing better-for-you frozen breakfast category through broad retail distribution and a strong value proposition centered on taste, convenience, and products designed to meet a variety of dietary needs and preferences.
Cal-Maine Foods, Inc. (NASDAQ:CALM) is the largest egg producer in the United States and a leading company in the egg-based food industry.
9. American Electric Power Company, Inc. (NASDAQ:AEP)
Analyst Upside Potential as of May 29: 12.30%
Dividend Yield as of May 29: 3.01%
On May 29, Truist analyst Richard Sunderland lowered his price recommendation on American Electric Power Company, Inc. (NASDAQ:AEP) to $145 from $148. He reiterated a Buy rating on the stock. The update came as part of a broader research note covering Power and Utilities companies. The firm said that positive estimate revisions would reinforce the view that American Electric is well-positioned to benefit from nationwide data center construction. Truist also noted that the pace of data center development could still provide upside surprises, even compared with its already favorable outlook. The analyst shared these views in a research note to investors.
Earlier, on May 21, Morgan Stanley analyst David Arcaro reduced the firm’s price target on AEP to $129 from $136 and maintained an Overweight rating on the shares. The firm updated its April price targets for Regulated & Diversified Utilities and Independent Power Producers (IPPs) across North America. Morgan Stanley noted that utility stocks underperformed the S&P 500 during the month, according to the analyst’s note to investors.
American Electric Power Company, Inc. (NASDAQ:AEP) is an electric utility holding company. Through its operating utilities, the company provides generation, transmission, and distribution services to more than five million retail customers across Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia, and West Virginia.
8. General Mills, Inc. (NYSE:GIS)
Analyst Upside Potential as of May 29: 12.55%
Dividend Yield as of May 29: 7.11%
On May 28, BofA lowered its price recommendation on General Mills, Inc. (NYSE:GIS) to $36 from $42. It retained a Neutral rating on the stock. The move came as the firm updated its sales estimates for several packaged food companies using scanner data collected through May 16.
A few weeks earlier, on May 13, Piper Sandler analyst Michael Lavery cut his price goal on GIS to $41 from $45, citing weaker growth expectations. Despite the lower target, the firm kept its Overweight rating on the shares. Piper Sandler said General Mills appears to be on pace to meet its updated fiscal 2026 guidance, though results are likely to land near the lower end of the company’s forecast range.
General Mills, Inc. (NYSE:GIS) is a global food company that manufactures and markets branded consumer products. Its business is organized into four segments: North America Retail, International, North America Pet, and North America Foodservice.
7. International Paper Company (NYSE:IP)
Analyst Upside Potential as of May 29: 17.10%
Dividend Yield as of May 29: 5.53%
On May 18, International Paper Company (NYSE:IP) announced that it has expanded its packaging operations with the acquisition of Delmarva Corrugated Packaging in Dover, Delaware. The deal adds another facility to the company’s network and is expected to strengthen its presence in the region while increasing its ability to supply sustainable packaging products to customers.
The acquisition also gives International Paper additional production capacity and supports its broader growth plans in the packaging market. Tom Hamic, Executive Vice President and President, Packaging Solutions North America, International Paper, made the following remark:
“This acquisition strengthens our footprint in the region and supports our long term growth strategy. The Dover facility’s strong customer base and strategic location expand our ability to deliver high-quality, sustainable packaging solutions with greater speed and reliability. We look forward to welcoming the team and working closely with customers to ensure a smooth and successful integration.”
The acquisition is in line with International Paper’s ongoing efforts to create value for its customers, shareholders, and employees while continuing to grow its packaging business.
International Paper Company (NYSE:IP) is a sustainable packaging solutions company. It operates through Packaging Solutions North America and Packaging Solutions EMEA. Its offerings include packaging, packaging services, and recycling.
6. Papa John’s International, Inc. (NASDAQ:PZZA)
Analyst Upside Potential as of May 29: 18.2%
Dividend Yield as of May 29: 5.47%
On May 15, Stephens maintained its Overweight rating on Papa John’s International, Inc. (NASDAQ:PZZA). It reiterated its $40 price target on the stock following a Reuters report that the company’s largest franchisee has joined Irth Capital’s latest effort to acquire the pizza chain. The firm said the development marks another chapter in the ongoing acquisition story surrounding Papa John’s. According to the analyst, takeover interest has helped support the stock’s valuation despite continued pressure from weak customer traffic, same-store sales challenges, and ongoing repositioning efforts.
The analyst noted that near-term sentiment is likely to remain under pressure due to softer traffic trends and planned menu simplification initiatives. Even so, Stephens remains positive on the company’s longer-term recovery prospects. The firm believes refranchising efforts, supply chain savings, and a leaner cost structure provide a credible path toward margin improvement.
On May 8, Piper Sandler analyst Brian Mullan lowered the firm’s price goal on Papa John’s to $30 from $32. He maintained a Neutral rating following the company’s quarterly results. The firm pointed out that North America’s same-store sales declined 6.4%, coming in below consensus expectations. According to Piper Sandler, the result reflects the difficult operating environment facing the quick-service restaurant industry broadly, and the pizza category in particular. Management also indicated during the earnings call that same-store sales trends in the second quarter have so far been running slightly worse than the 6.4% decline reported in the first quarter. The firm said this compares unfavorably with pre-earnings expectations and is likely to result in downward revisions to consensus same-store sales estimates as the quarter progresses.
Papa John’s International, Inc. (NASDAQ:PZZA) operates and franchises pizza delivery and carryout restaurants under the Papa Johns brand. In certain international markets, the company also operates dine-in and delivery restaurants.
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