We’re through the final turn of 2025, with the finish line already in sight. That makes now the perfect moment to zero in on stocks that can deliver returns as the holiday season approaches. The best portfolios rest on a diversified approach, combining high- and low-risk, value and growth, and passive income strategies.
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That last point brings us to dividend stocks, the classic play for investors seeking high returns and regular income streams. While dividend investing is usually considered a defensive strategy, best applied when markets turn down, its particular advantages are relevant during bull markets, too. To start with, dividend stocks are usually more stable and less prone to sharp changes than riskier asset classes. In addition, the best dividend stocks offer high yields and reliable payments, a combination that ensures a steady income stream – which can always be reinvested.
With that in mind, we tapped into TipRanks’ database to pinpoint two dividend champs that feature exactly those attributes: high yields of 9%-plus, and solid payment histories. Even better, several analysts on the Street view these stocks as attractive picks. Let’s give them a closer look, and find out why.
Hercules Capital (HTGC)
First on our list today is Hercules Capital, a business development company (BDC) that targets emerging companies in various fields of science and technology. Hercules acts as a specialty provider for financial services, making loans and funding available to venture-backed client firms in high-risk fields – a client base that does not always have ready access to more traditional sources of credit and growth capital. Hercules works with clients in the life sciences, high technology, SaaS finance, and sustainable-plus-renewable fields.
Having carved out this niche, Hercules has grown into a sizable player. Founded in December 2003, the company is now approaching 22 years in business. Over that time, it has committed more than $23 billion in funding to over 690 client firms and currently manages $5.3 billion in assets. The growth continues: in its most recent quarter, 2Q25, Hercules reported new debt and equity investment commitments totaling $1 billion.
The firm’s willingness to back riskier borrowers is balanced by the returns it can generate, and Hercules makes sure those returns flow back to shareholders. Since 2005, the company has paid regular dividends, and more recently, it has supplemented those payouts with special dividends. This consistent track record has made income distribution a central part of its investor appeal.
That commitment was evident in the latest declaration, which included both a base payment of 40 cents per share and a 7-cent special dividend. Together, the 47-cent payout translated to a forward yield of 9.73% based on the annualized total of $1.88 per share.
Importantly, Hercules backs those dividends with solid fundamentals. In 2Q25, the company posted a record net investment income of $88.7 million, or $0.50 per share. That figure covered the dividend comfortably, offering 125% coverage of the base payment.
Yet, despite this strength, the stock has slipped nearly 4% year-to-date, which some analysts view as a buying opportunity. Citizens JMP’s Brian McKenna highlights Hercules’ expanding scale and competitive edge as reasons for long-term optimism.
“Despite such healthy underlying fundamentals, and we would argue these are some of, if not the best, in our entire BDC coverage, the stock has underperformed… Thus, we remain buyers of stock, specifically at ~$19 per share and a 1.60x + P/BV, as we see a strong trajectory for HTGC to appreciate back to the low-to-mid $20s over the next several quarters,” McKenna opined.
Reflecting that bullish outlook, McKenna assigns HTGC an Outperform (i.e., Buy) rating and a $24 price target, pointing to a potential one-year gain of ~25%. When factoring in the dividend yield, the total return could reach ~35% over the next 12 months. (To watch McKenna’s track record, click here)
Overall, among the 4 most recent analyst reviews, there’s an even split of 2 Buys and 2 Holds, giving Hercules a Moderate Buy consensus. Shares currently change hands at $19.23, with an average target price of $20.81, suggesting an 8% upside potential over the coming year. (See HTGC stock forecast)
Starwood Property (STWD)
The next dividend name we’re looking at is Starwood, a real estate investment trust (REIT). The company has built a broad portfolio that spans loan originations and investments, property holdings in high-quality stabilized assets, infrastructure financing in the power and energy sectors, and real estate investing and servicing in the commercial sector. This diversified approach is designed to maximize return potential for Starwood’s stockholders.
In recent months, Starwood has been moving to expand its real estate portfolio, with a strategic effort to expand its net lease holdings. In net lease rental properties, the tenant takes on certain additional responsibilities alongside the rent. These usually include utility payments, taxes, and insurance coverage; the exact terms are covered in the lease. There are advantages for both owners and tenants, with the property owners turning the holding into a passive income generator while the tenant has greater freedom to customize the property. During the second quarter of this year, Starwood deployed $2.2 billion in capital toward net lease acquisitions.
Starwood was founded in 2009, and in the years since, the company has invested $108 billion in its various properties. The company’s current portfolio is valued at $27 billion, and Starwood describes the array of investment areas as creating a “multi-cylinder platform” that protects against risk while ensuring returns.
Those returns are visible in the company’s regular dividend. Starwood has been paying out dividends for some 15 years, without missing a quarterly distribution. In the last dividend declaration, on July 16, the company announced a 48-cent payment to go to common share stockholders on October 15. At the annualized rate of $1.92 per common share, the dividend yields 9.4%.
During its last reported quarter, 2Q25, Starwood showed a top line of $444.3 million, a total that missed the forecast by over $24 million. The company’s EPS, by non-GAAP measures, came to 43 cents per share, beating the estimates by a nickel.
It was Starwood’s diverse portfolio footprint that caught the eye of Donald Fandetti, a 5-star analyst from Wells Fargo.
“We believe STWD, with their diversified investment strategy, is well positioned to play offense as the CRE lending markets continue to recover. Potential Fed cuts should boost sentiment for the stock and improve CRE loan credit, in our view. Management seemed positive on the loan growth outlook near-term,” Fandetti noted.
Quantifying that stance, the analyst rates STWD shares as Overweight (i.e., Buy), with a $23 price target that suggests the stock will gain ~12% heading into next year. Together with the dividend yield, the one-year return on this stock could exceed 21%. (To watch Fandetti’s track record, click here)
All in all, Starwood has a Moderate Buy consensus rating, based on 7 analyst reviews that include 5 Buys and 2 Holds. The shares are priced at $20.47, and their $22.17 average target price implies a 12-month share appreciation of ~8%. (See STWD stock forecast)
To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.