With the Federal Reserve recently cutting rates for the first time in four years, dividend stocks are looking increasingly attractive. Lower rates make high-yielding stocks even more appealing, especially those with solid fundamentals like low debt levels and strong growth potential. We’ve identified a few standout names that not only offer generous payouts but also have the potential for significant price appreciation in the months ahead. Let’s dive into three high-dividend stocks that could benefit from the upcoming rate cuts.
Exxon Mobil (NYSE: XOM) Energy Giant with Strong Dividend and Growth Potential
Exxon Mobil stands out as a top pick in the energy sector, combining a solid dividend yield with low debt and significant upside potential. Currently, Exxon boasts a 3.37% dividend yield and one of the lowest debt-to-equity ratios in its peer group at 16%, highlighting the company’s strong balance sheet. Exxon’s stock has performed well this year, up 14% year-to-date, outperforming many of its energy peers.
Analysts see even more room for growth, with consensus price targets suggesting a potential gain of over 17% in the next 12 months. Morgan Stanley’s Devin McDermott, who recently maintained his overweight rating on Exxon, sees a potential upside of 28%, citing the company’s resilient operations and integrated business model that can weather lower commodity prices. Exxon’s global presence and diversified energy portfolio make it a reliable choice for dividend investors looking to hedge against economic uncertainties.
Devon Energy (NYSE: DVN) High Yield and High Upside Despite Recent Struggles
Devon Energy is another high-dividend name worth considering, particularly for those seeking higher yield opportunities. Devon’s dividend yield is the highest on our list at 5.05%, offering substantial income for investors. While the stock has struggled this year, down about 11% year-to-date due to operational missteps and integration challenges, analysts believe there’s significant upside ahead. Consensus estimates point to more than 40% potential gains, making Devon a compelling pick despite its recent hurdles.
Devon’s commitment to returning capital to shareholders through dividends remains strong, and the company’s robust capital return program helps offset some of the recent volatility. As the rate-cutting cycle begins, Devon’s high yield combined with its growth prospects could present a lucrative opportunity for investors willing to look past short-term setbacks.
Hewlett Packard Enterprise (NYSE: HPE) Steady Returns and Compelling Valuation
Stepping outside the energy sector, Hewlett Packard Enterprise offers a tech play with a solid dividend and growth outlook. With a 3% dividend yield and a forecasted upside of over 20% according to analysts, HPE provides a balance of income and growth potential that’s hard to ignore. The stock is up 6.2% this year and recently gained traction after Bank of America’s Wamsi Mohan upgraded it to a buy, citing an attractive valuation at current levels.
Mohan raised his price target to $24, implying nearly 39.3% upside, highlighting HPE’s potential to deliver steady returns even in a shifting economic environment. As the tech sector continues to benefit from a lower cost of capital due to rate cuts, HPE stands out as a reliable option for dividend-focused investors looking for exposure to technology.
