8 Best Dividend Leaders to Buy According to Wall Street Analysts

1. CVS Health Corporation (NYSE:CVS)

Upside Potential as of December 19: 54.2%

CVS Health Corporation (NYSE:CVS) is an American healthcare company that operates a retail pharmacy chain. The company utilizes its extensive retail network to provide access to a wide array of health services and pharmacy benefits, supported by its Aetna health insurance division, which serves over 27 million members. Although this vertically integrated model aims to deliver cost savings and efficiency throughout the healthcare supply chain, recent performance has fallen short of expectations. Increased enrollment in its health plans, especially among seniors in Medicare Advantage programs, combined with high service utilization and persistent cost pressures, has negatively affected profitability. The stock is down by nearly 46% since the start of 2024.

That said, CVS Health Corporation (NYSE:CVS) reported strong earnings in the third quarter of 2024. The company’s revenue of $95.4 billion grew by over 6.3% on a YoY basis. The results showcased robust performance in the Health Services and Pharmacy & Consumer Wellness segments. However, they also emphasized the ongoing need for a collaborative approach across the enterprise to address macroeconomic challenges impacting the Health Care Benefits segment.

In the first nine months of the year, CVS Health Corporation (NYSE:CVS) generated an operating cash flow of $7.2 billion. The company ended the quarter with $6.9 billion available in cash and cash equivalents. Though the company does not hold any dividend growth streak, it has been making regular dividend payments to shareholders since 1997. Its quarterly dividend comes in at $0.665 per share for a dividend yield of 6.08%, as of December 19. With an upside potential of 54.2%, CVS is one of the best dividend leaders on our list.

As of the end of Q3 2024, 63 hedge funds, growing from 60 in the previous quarter, held stakes in CVS Health Corporation (NYSE:CVS), according to Insider Monkey’s database. The overall value of these stakes is over $4.2 billion.

Overall, CVS Health Corporation (NYSE:CVS) ranks first on our list of the best dividend leaders according to analysts. While we acknowledge the potential for CVS to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CVS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. 

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