Wall Street Analysts Are Confident About These 3 Dividend-Paying Stocks

Looking ahead to 2026, investors’ focus may shift from fixed income instruments to attractive dividend-paying stocks amid lower interest rates.

Choosing the right names from a large universe of dividend-paying companies is a difficult task. Following the stock picks of top Wall Street analysts can help investors make the right choices because these experts assign their ratings after conducting an in-depth analysis of a company’s fundamentals.

Here are three dividend-paying stocks highlighted by top Wall Street professionals, as tracked by TipRanks, a platform that ranks analysts based on their past performance.

Oil and gas giant Chevron (CLC) is this week’s top dividend pick. The company returned $6 billion in cash to shareholders in the third trimester via $3.4 billion in dividends and $2.6 billion in share repurchases. With a quarterly dividend of $1.71 per share (annualized dividend of $6.84 per share), Chevron offers a yield of approximately 4.5%.

Following meetings with Chevron management, Piper Sandler analyst Ryan Todd reiterated a Buy rating on CVX stock with a $178 price target. Interestingly, TipRanks’ AI analyst is also bullish on the energy company, with an “outperform” rating and a $164 price target.

Todd noted that while the current scenario of an unfavorable crude oil environment and positive refining activity has affected Chevron’s performance, his meetings with management reflected the company’s strong position.

The analyst says Chevron’s capital efficiency is underestimated. In particular, the company’s upstream investment expenses/boe (barrel of oil equivalent) product is 29% lower than the peer average. He added that given lower capital and operating expenses, benefits of artificial intelligence (AI) that have yet to be realized, and a better-than-expected resource base, Chevron’s annual free cash flow (FCF) growth outlook of 10% per year appears conservative.

Additionally, Todd argued that “even though investors continue to be concerned about the total cost of ownership [Tengizchevroil joint venture] Contract extensions, lingering questions about resource depth after 2030 are wrong. » On this subject, the analyst noted that in addition to the projects included in Chevron’s official plan, management is optimistic about additional opportunities presented by greater global access (particularly in the Middle East), increased exploration activities and expansion and technology-driven prospects.

Todd ranks 868th among more than 10,200 analysts tracked by TipRanks. Its ratings have been profitable 58% of the time, providing an average return of 8.5%. See Chevron’s ownership structure on TipRanks.

Catering business Darden Restaurants (DRI) has a portfolio of brands including Olive Garden, LongHorn Steakhouse and Yard House. It recently announced a quarterly dividend of $1.50 per share, payable on February 2, 2026. With an annualized dividend of $6 per share, DRI offers a yield of 3.2%.

Following the company’s mixed results for the second quarter of fiscal 2026, BTIG analyst Peter Saleh reiterated a Buy rating on Darden stock with a $225 price target. In comparison, TipRanks’ AI Analyst has a price target of $218 with an “outperform” rating.

Saleh noted that Darden had a mixed, but “mostly positive” quarter, with better-than-expected comparable sales, fueled by improving traffic across the company’s major brands.

“Its strategy of underpricing inflation, relying on delivery and offering a desirable menu resonated with customers, leading to another quarter of significant industry outperformance,” Saleh said.

The five-star analyst noted that high beef prices continued to be a headwind and weighed on restaurant margins and earnings per share (EPS) for the quarter. That said, Saleh is optimistic that Darden will achieve its goals as beef costs appear to have peaked, labor cost pressures are easing and management is leaning lightly on price increases to offset raw material costs.

Overall, Saleh continues to be impressed with Darden’s sales momentum, and while profits have yet to keep pace, they should improve in the future.

Saleh ranks 641st among more than 10,200 analysts tracked by TipRanks. Its ratings have been profitable 61% of the time, providing an average return of 10.5%. See Darden restaurant stats on TipRanks.

This week’s third dividend pick is Ares Capital (ARCC), a specialty finance company that provides direct loans and other investments to middle-market private companies. The company announced a dividend of 48 cents per share, payable on December 30, 2025. With an annualized dividend per share of $1.92, ARCC stock yields 9.5%.

In his latest research note on business development companies (BDCs), RBC Capital analyst Kenneth Lee called Ares Capital one of his favorite BDC names for 2026 and reaffirmed a buy rating with a $23 price target. TipRanks’ AI analyst has assigned an “outperform” rating to ARCC stock with a $24 price target.

Although Lee is less constructive on BDC heading into 2026 due to a potential decline in net interest income (NII) and return on equity (ROE) from falling base rates, he remains bullish on Ares Capital. In particular, he cited management’s confidence in maintaining dividends at current levels despite expectations of lower base rates.

Among key strengths, Lee highlighted ARCC’s dominant position in the BDC market, its broad scale and strong originations on the Ares direct lending platform. He also highlighted Ares Capital’s more than 20 years of experience.

“In our view, ARCC’s dividends are well supported by the company’s core earnings per share generation as well as potential realized net gains,” Lee said to support his bullish stance.

Lee ranks 341st among more than 10,200 analysts tracked by TipRanks. Its ratings were successful 66% of the time, delivering an average return of 11.5%. View Ares Capital’s insider trading activity on TipRanks.