The Valero Energy refinery in Texas City, Texas.
F. Carter Smith | Bloomberg | Getty Images
The focus on dividend stocks is growing as the Federal Reserve announced another interest rate cut. Investors can consider stocks that offer dividends and also have the potential to drive capital appreciation, thereby increasing overall returns.
In this context, the recommendations of leading Wall Street analysts can help us identify stocks that have solid upside potential and pay attractive dividends. These experts' stock selection is based on an in-depth analysis of a company's growth opportunities and ability to pay regular dividends.
Here are three dividend stocks highlighted by Wall Street's top pros, tracked by TipRanks, a platform that ranks analysts based on their past performance.
Valero Energy
We're starting this week with Valero Energy (VLO), a producer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products. In the third quarter of 2025, Valero returned $1.3 billion to shareholders through $351 million in dividends and $931 million in share repurchases. On October 29, Valero declared a quarterly dividend of $1.13 per share. With an annual dividend of $4.52, VLO stock offers a yield of 2.7%.
Valero Energy recently reported positive third-quarter results, supported by strong refining margins. Given the company's third-quarter performance, strong refining outlook and attractive return on capital strategy, Goldman Sachs analyst Neil Mehta reiterated his Buy rating on VLO stock and increased his price target to $197 from $180.
“Given the company's balance sheet strength, cost-effective operations and operational execution, we continue to view VLO as a key beneficiary of our more constructive refining outlook,” Mehta said.
The 5-star analyst noted that management discussed a constructive outlook for the refinery during the third-quarter earnings conference call, citing limited net capacity additions and widening crude oil differentials. Mehta also emphasized that Valero's non-refining businesses performed better than Goldman Sachs expected. Looking forward, Mehta expects low inventories, stable demand and limited net refining capacity additions to support tighter supply/demand expectations for 2026.
Mehta particularly emphasized management's continued focus on capital gains and commitment to allocating excess free cash flow to shareholders. The analyst believes that a stronger refining environment will contribute to meaningful free cash flow generation, which could enable a return on capital of approximately $4.6 billion in 2026, representing a return on capital of 9%.
Mehta is ranked #812 among more than 10,000 analysts tracked by TipRanks. Its valuations were profitable 58% of the time and delivered an average return of 8.7%.
Albertsons
We turn to the next dividend stock: Albertsons Companies (ACI). The food and drug retailer recently announced positive second-quarter fiscal 2025 results driven by strong pharmacy sales and digital business. On Oct. 14, Albertsons announced a quarterly dividend of 15 cents per share, payable on Nov. 7. With an annualized dividend of 60 cents per share, ACI stock offers a dividend yield of 3.3%.
After Albertsons reported better-than-expected fiscal second-quarter results, Tigress Financial analyst Ivan Feinseth reiterated his Buy rating on ACI stock and slightly increased his price target to $29 from $28. The analyst is bullish on Albertsons as the company “accelerates growth through AI-powered digital sales, an expanded loyalty ecosystem and a high-margin retail media platform.”
Feinseth emphasized that Albertsons is transforming from a traditional grocer to a data-driven, digitally integrated grocery and wellness platform. This transformation is being driven by the company's e-commerce expansion, loyalty program integration and fast-growing advertising network Albertsons Media Collective, which Feinseth believes is well-positioned to become one of its most profitable long-term growth engines.
The top-rated analyst noted that ACI's For U loyalty program is driving both digital engagement and spending growth. In fact, For U membership grew more than 13% year-over-year in Q2FY25, reaching over 48 million active participants. The growing member base is driving ACI's business as members transact more frequently, spend more and increasingly utilize cross-channel rewards, Feinseth noted.
Additionally, Feinseth emphasized that Albertsons continues to increase shareholder returns through ongoing dividend increases and share repurchases, including the recently announced additional $750 million in accelerated share repurchase authority. He expects ACI stock to deliver a total return of nearly 50%, including dividends.
Feinseth is ranked #296 among more than 10,000 analysts tracked by TipRanks. Its valuations were profitable 62% of the time and delivered an average return of 14.2%.
Williams Company
Finally, let's take a look at energy infrastructure provider Williams Companies (WMB). On Oct. 28, Williams declared a quarterly cash dividend of 50 cents per share, payable on Dec. 29, 2025, representing a year-over-year increase of 5.3%. With an annual dividend of $2 per share, WMB stock offers a yield of 3.5%.
Ahead of Williams' Q3 results, scheduled after the market close on November 3, RBC Capital analyst Elvira Scotto reiterated her Buy rating on WMB shares with a price forecast of $75. In a preview of Q3 earnings from U.S. midstream companies, Scotto said Williams and Targa Resources (TRGP) were their preferred earnings names.
Scotto noted that the long-term tailwinds for natural gas due to increasing electricity demand for electrification and artificial intelligence (AI)/data center growth are increasing the need for more energy infrastructure. The 5-star analyst believes that among the stocks she covers, “WMB is best positioned to benefit given its presence in the gas transportation space and its energy innovation projects.”
Additionally, Scotto expects WMB to achieve a CAGR (compound annual growth rate) of approximately 10% of its EBITDA (earnings before interest, taxes, depreciation and amortization) from 2025 to 2030. The analyst looks forward to further information on WMB's recently announced Power Innovation projects and any new projects. Scotto expects Q3 2025 numbers to increase quarter-on-quarter across all business lines, with Transmission, Golf and Energy accounting for the largest absolute increase.
Scotto sees February's WMB analyst day as the next catalyst for the stock. The analyst expects WMB to increase its EBITDA growth target from 5% to 7% to high single digits or more.
Scotto is ranked #270 among more than 10,000 analysts tracked by TipRanks. Their reviews were successful 64% of the time and delivered an average return of 13.7%.