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Jefferies and Wolfe Research Highlight Top Dividend-Paying Stocks with Strong Fundamentals

Jefferies recently highlighted buy-rated, domestically-focused mid-cap companies that beat earnings expectations and issued solid guidance, favoring them over international names despite the iShares MSCI All Country World Index ex U.S. ETF (ACWX) gaining 14% in 2025 compared to a fractional S&P 500 increase.

U.S. small-mid cap strategist Steven DeSanctis noted that domestic stocks are attractively priced, supported by factors like falling oil prices and a potentially weakening U.S. dollar. Meanwhile, Wolfe Research identified stocks with second quintile dividend yields and low price-to-earnings (P/E) ratios, offering reliable income without the risks associated with ultra-high yields.

Below are six standout companies from Jefferies and Wolfe Research, each offering dividends and upside potential.

Top Dividend-Paying Stocks for 2025

Lamb Weston: Frozen Potato Leader with Strong Upside

Lamb Weston, a producer of frozen potato products, is a Jefferies buy-rated stock with a $75 price target, implying 41% upside from Tuesday’s close, and a 2.78% dividend yield.
Shares are down 20% year-to-date, but the company reported fiscal third-quarter adjusted earnings of $1.10 per share, beating the 86 cents expected, with revenue of $1.52 billion surpassing the $1.49 billion consensus.
Lamb Weston reaffirmed its full-year guidance, countering negative sentiment. Following activist involvement in fall 2024, the company is exploring value creation and cost-saving opportunities with a strategic advisor, with its U.S. assets potentially attracting suitors. It, however, faces headwinds but is positioned for operational improvements.

Virtu Financial: High-Frequency Trading with Growth Momentum

Virtu Financial, a high-frequency trading firm, has a Jefferies $47 price target, suggesting 14% upside, with a 2.33% dividend yield.
Shares are up over 15% in 2025. First-quarter normalized adjusted earnings were $1.30 per share, topping the $1.20 consensus.
It raised 2025 and 2026 earnings estimates to $4.10 and $4.05 per share, respectively, driven by elevated volatility, retail participation, and growth in asset classes like metals. Long-term tailwinds include options, ETFs, crypto, and equity markets.
Analysts noted the diversity of asset class contributions as a strength.

STAG Industrial: Industrial REIT with Robust Leasing Trends

STAG Industrial, a U.S.-focused industrial REIT, offers a 4.21% dividend yield with a Jefferies $45 price target, indicating 29% upside.
Shares are up nearly 5% year-to-date. First-quarter core funds from operations were 61 cents per share, beating estimates by 1 cent, with revenue of $205.6 million exceeding the $201.1 million expected.
Cash-leasing spreads rose 27.3%, driven by demand for onshoring manufacturing and supply chain reconfiguration. Analyst Jonathan Petersen expects STAG to outperform coastal peers.
Strong leasing trends position STAG for sustained growth.

Western Alliance Bancorp: Regional Bank with Strong Growth Potential

Western Alliance Bancorp, a Phoenix-based regional bank, offers a 2.1% dividend yield and is on Wolfe Research’s list for its low P/E ratio of 7.7 times next 12 months’ estimated earnings.
Shares are down 13% year-to-date but have a consensus price target implying 27% upside, with 12 of 13 analysts rating it a buy.
Truist Securities initiated coverage with a buy rating, citing Western Alliance’s strong capital and liquidity positions post-2023 regional banking tumult. Analyst David Smith highlighted its historical 20%+ return on tangible common equity and expects it to remain among the most profitable midsize banks.
The bank’s organic growth and fortified balance sheet make it a compelling pick.

Qualcomm: Chipmaker with Steady Income and Upside

Qualcomm, a chipmaker, offers a 2.4% dividend yield and trades at a forward P/E of 12.4 times estimated earnings.
Shares are down 3% in 2025. Fiscal second-quarter results beat estimates, though revenue guidance fell short.
Bernstein’s Stacy Rasgon maintained an outperform rating, citing balanced near-term expectations and management’s commitment to returning 100% of free cash flow via buybacks. Consensus price targets suggest nearly 20% upside, with half of analysts rating it a buy or strong buy.
We think Qualcomm’s valuation and buyback strategy make it attractive for income investors.

Voya Financial: Retirement Services with Cash Flow Strength

Voya Financial, a retirement plan services provider, offers a 2.7% dividend yield and trades at a forward P/E of 7.6 times estimated earnings.
Shares are down over 2% year-to-date, with consensus price targets indicating 17% upside.
Piper Sandler’s John Barnidge reiterated an overweight rating, noting $200 million in first-quarter cash generation and the integration of OneAmerica Financial’s retirement plan business, which boosted Voya’s brand. The wealth business saw $31 billion in first-quarter inflows.
Voya’s focus on retirement services and strong cash flows position it for growth.

Note: This was written a few days ago and some numbers may have changed since.

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