Investors love dividend stocks, especially the high-yield variety, because they offer a significant income stream and have massive total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation.
For example, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13%. That is, 10% for the increase in stock price and 3% for the dividends paid.
We screened our 24/7 Wall St. high-yield dividend stock research database, looking for stocks trading below the $20 level that offer investors enormous total return potential. While more suited for growth and income investors with higher risk tolerance, all five of these stocks look like solid ideas as we head into 2025. All are rated Buy at top Wall Street firms.
Why do we cover high-yield dividend stocks?
Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.
AES
AES is an American utility and power generation company.
This conservative utility stock offers a hefty 5.30% dividend and considerable upside potential. AES Corp. (NYSE: AES | AES Price Prediction) and its subsidiaries operate as a diversified power generation and utility company in the United States and internationally.
The company owns and operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries; owns and operates utilities to develop or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market.
It uses various fuels and technologies to generate electricity, such as:
- Coal
- Gas
- Hydro
- Wind
- Solar
- Biomass
- Renewables, comprising energy storage and landfill gas
The company owns and operates a generation portfolio of approximately 34,596 megawatts and distributes power to 2.6 million customers.
Barclays has an Overweight rating on the shares with a massive $23 price target.
Amcor
Amcor provides high-quality, responsible packaging solutions for food, beverage, pharmaceutical, and other packaging requirements.
This top company is a Dividend Aristocrat, and it makes sense now as it produces products that are always needed and pays a robust 5.01% dividend. Amcor PLC (NYSE: AMCR) manufactures and sells packaging products in Europe, North America, Latin America, Africa, and the Asia Pacific regions. It operates through two segments.
The Flexibles segment provides flexible and film packaging products in food and beverage, medical and pharmaceutical, fresh produce, snack food, personal care, and other industries.
The Rigid Packaging segment offers rigid containers for a range of beverage and food products, including:
- Carbonated soft drinks
- Water
- Juices
- Sports drinks
- Milk-based beverages
- Spirits
- Beer
- Sauces
- Dressings
- Spreads
- Personal care items
- Plastic caps for various applications
The company sells its products primarily through its direct sales force.
JPMorgan Chase has an Overweight rating and a $11.10 target price.
Energy Transfer
Energy Transfer is one of North America’s largest and most diversified midstream energy companies.
This top master limited partnership is a safe way for investors looking for energy exposure and income, as the company pays a hefty 6.75% distribution. Energy Transfer L.P. (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all of the major domestic production basins.
The company is a publicly traded limited partnership with core operations that include:
- Complementary natural gas midstream, intrastate, and interstate transportation and storage assets
- Crude oil, natural gas liquids (NGL), and refined product transportation and terminalling assets
- NGL fractionation
- Various acquisition and marketing assets.
After purchasing Enable Partners in December 2021, Energy Transfer owns and operates more than 114,000 miles of pipelines and related assets in 41 states, covering all of the major U.S. producing regions and markets. This further solidifies its leadership position in the midstream sector.
Through its ownership of Energy Transfer Operating, formerly known as Energy Transfer Partners, the company also owns Lake Charles LNG Company, the general partner interests, the incentive distribution rights, and 28.5 million standard units of Sunoco L.P. (NYSE: SUN), and the public partner interests and 39.7 million standard units of USA Compression Partners L.P. (NYSE: USAC).
UBS has a Buy rating to go with a $23 target price.
Ford
This American automotive corporation was founded in 1903 by Henry Ford and 11 associate investors.
This legacy carmaker pays shareholders a rich 5.71 dividend. Ford Motor Co. (NYSE: F) develops, delivers, and services a range of Ford trucks, commercial cars and vans, sport utility vehicles, and Lincoln luxury vehicles worldwide.
It operates through five segments:
- Ford Blue
- Ford Model e
- Ford Pro
- Ford Next
- Ford Credit
The company sells Ford and Lincoln vehicles, service parts, and accessories through distributors, dealers, and dealerships to commercial fleet customers, daily rental car companies, and governments.
It also engages in vehicle-related financing and leasing activities to and through automotive dealers.
In addition, the company provides retail installment sale contracts for:
- New and used vehicles
- Direct financing leases for new cars to retail and commercial customers, such as leasing companies, government entities, daily rental companies, and fleet customers.
Further, it offers wholesale loans to dealers to finance the purchase of vehicle inventory, loans to dealers to finance working capital and enhance dealership facilities, purchase dealership real estate, and other dealer vehicle programs.
Barclays has an Overweight rating with a $14 price target.
Host Hotels & Resorts
Host Hotels & Resorts is the world’s largest publicly traded lodging REIT, with a geographically diverse portfolio of luxury and upper upscale hotels.
This stock will stay in demand as travel continues to pick up in 2025, and investors will grab a rich 4.30% dividend. Host Hotels & Resorts Inc. (NASDAQ: HST) is an S&P 500 company, the largest lodging real estate investment trust, and one of the largest owners of luxury and upper-upscale hotels.
The company owns 76 properties in the United States and five internationally, totaling approximately 43,400 rooms. It also holds non-controlling interests in seven domestic and one international joint venture. A disciplined approach to capital allocation and aggressive asset management guides the company.
Host Hotels & Resorts partners with premium brands such as:
- Marriott
- Ritz-Carlton
- Westin
- Sheraton
- W
- St. Regis
- The Luxury Collection
- Hyatt
- Fairmont
- 1 Hotels
- Hilton
- Four Seasons
- Swissôtel
- ibis
Wells Fargo has an Overweight rating on the stock with a $22 target.
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