High-Yield Dividend Stocks Expected to Rise Over 40%

Investors eye potential gains with high-yield dividend stocks. Analysts expect AES, CVS Health, and Devon Energy could soar over 40% by 2025, indicating a positive outlook in the market. Analysts remain split on AES yet mostly bullish about CVS and Devon.

Date: 12-01-2025

AI Rating: 6

Investment Range Exceeded
Analysts have suggested three high-yield dividend stocks that could show substantial price appreciation over the next year. These stocks are AES (NYSE: AES), CVS Health (NYSE: CVS), and Devon Energy (NYSE: DVN). Each has seen its share price drop by nearly 60% from recent peaks, but analyst projections indicate significant upside potential.

Future Price Targets
The average analysts' price target for AES suggests a potential increase of 47%. For CVS Health, analysts predict a 41% rise, while Devon Energy is anticipated to see a 42% increase. The substantial gap between current pricing and projected targets illustrates strong investor optimism within these sectors.

Dividends and Payout Ratios
AES boasts a forward dividend yield of 5.68%, with a payout ratio of 47.5%. It has raised its dividend for 12 consecutive years, indicating a stable income stream for investors. Similarly, CVS Health’s forward dividend yield stands at 5.78%, showing its capability to reward shareholders despite previous static dividends. Devon Energy's dividends consist of both fixed and variable components, currently yielding 4.13%, with the potential to increase based on cash flows tied to oil prices.

Considerations and Market Challenges
However, the market landscape is not without risks. Policy changes regarding renewable energy could impact AES. CVS Health’s Aetna unit is facing scrutiny from lawmakers concerning pharmacy benefits management, which could impede growth. Devon may enjoy benefits from a more lenient regulatory environment but could also see pressure if domestic production rises, leading to lower fossil fuel prices.

Stocks: AES CVS DVN