7%-Plus Dividend Yield and Double-Digit Upside: Raymond James Picks 2 Dividend Stocks to Buy

The first-quarter earnings are mainly behind us, and a few things are clear. To start with, it’s been a strong earnings season – the strongest in the past five quarters. Earnings are showing year-over-year growth well in excess of 25%, and earnings revisions are showing the fastest-paced increase in four years. Multiple factors are supporting earnings this season, including solid consumer sentiment and continued strength in the tech mega-caps.

Watching the situation from Raymond James, CIO Larry Adam tags margins as a key point, writing, “The resilience of US corporate profitability has been striking. Despite tariff pressures and higher energy and input costs, S&P 500 margins rose for a fifth consecutive quarter, reaching a record high of 16%. To put that in perspective, margins have increased by three percentage points over the past two years, an outcome that is historically unprecedented outside of recessionary recovery periods. That said, early signs of pressure are beginning to emerge. While the Iran conflict affected only one month of 1Q results, roughly 30% of S&P 500 companies cited rising input costs − the highest share since 2022 − and eight of 11 sectors are expected to see declines in margins in 2Q. Although strong technology‑sector margins should keep overall profitability elevated relative to history, persistently high energy prices would raise downside risk going forward.”

In this environment, it’s only natural for investors to start gravitating toward dividend stocks. After all, if Adam is right, reliable income and defensive characteristics become more valuable in a volatile market. Dividend stocks offer investors a steady stream of cash flow while uncertainty surrounding margins, inflation, and energy costs continues to linger.

The analysts at Raymond James are on that case, picking out stocks that combine dividend yields of 7% or better and double-digit upside potential. But does the rest of Wall Street share that optimism? We turned to the TipRanks database to find out.

Delek Logistics Partners (DKL)

The first Raymond James pick that we’ll look at is Delek Logistics Partners, an energy asset company formed to own and operate the logistics, marketing, and midstream assets of the parent company, Delek US. DKL also acquires and develops additional assets in those same categories. The company’s total portfolio includes crude oil, refined products, and natural gas, as well as water used in the gathering processes. DKL gathers, processes, transports, and stores both crude oil and natural gas, and also markets, stores, and distributes a range of finished petroleum products.

DKL’s operations are located mainly in Texas, but also extend into Arkansas, Tennessee, and New Mexico. The company is a major operator in the Permian Basin, one of North America’s major hydrocarbon basins. Its infrastructure provides the essential background for safe, efficient, sustainable energy operations. The company’s produced water operations are key to the sustainable side of its overall business.

A few numbers show the scale of DKL’s business. The company has 9 distribution terminals for light products, approximately 1,188 miles of pipeline for crude oil and refined products, more than 200 MMcf/d of gas processing capacity, and well over 1.5 million Bbls/d of water disposal capacity.

Looking at the dividend, we find that DKL on April 23 declared a payment of $1.13 per unit – an increase from the previous payment of $1.125. At the new rate, the dividend annualizes to $4.52 per unit and gives a robust forward yield of 8.7%. The increased payout was paid out this past May 11.

In its 1Q26 financial release, DKL showed total revenues of $297.5 million – a total that was up 19% year-over-year and beat the forecast by over $57 million. The company had a GAAP EPS of $0.60 per share, missing the forecast by 20 cents per share. On a positive note, the company finished 1Q26 with over $9.9 million in cash and liquid assets, compared to $2.1 million at the end of the prior-year quarter.

Strong cash flow played a large part in Justin Jenkins’ outlook on the stock. The Raymond James expert wrote: “Despite a very volatile macro backdrop over the past few years, Delek Logistics has executed well to grow cash flow and is taking advantage of a solid footprint to capture incremental opportunities. Despite weather headwinds, 1Q26 was above our view, and we think the outlook remains solid, particularly in light of a much more constructive oil price environment. Despite solid growth and improved leverage, DKL trades at ~8x our 2028E EBITDA, at the bottom end of the midstream peer group (8-12x). DKL’s well-covered ~9% distribution yield is also near the highest in our coverage, adding to the total return opportunity. With what we see as an attractive entry point, we reiterate our Outperform rating and raise our target price to $60 on updated estimates.” (To watch Jenkins’ track record, click here.)

That’s the bullish view. Overall, DKL gets a Hold (i.e., Neutral) consensus rating from the Street’s analysts, based on 4 recent reviews that include 1 Buy and 3 Holds. The stock is trading for $51.70, and its $55.25 average target price implies a ~7% gain by this time next year. (See DKL stock forecast)

Easterly Government Properties (DEA)

The second stock on our list here is an office-space REIT, or real estate investment trust. REITs are known as ‘dividend champs’ in the markets – they get favorable tax treatment for returning profits directly to shareholders, and dividends make a convenient mode of compliance. Easterly Government Properties lives in the REIT sector and operates with a twist – the company acquires, develops, and manages commercial and office properties which are then leased to the US government. In short, this REIT helps provide the physical space and infrastructure that the Federal Government needs to house its workforce and serve the public.

Specifically, Easterly deals in Class A commercial properties, and its main customer is the General Services Administration (GSA) of the US government. Among other things, the GSA handles real estate matters for government agencies, as well as building oversight. Easterly, in working with the GSA, has 106 operating properties in 27 states, totaling 10.7 million leased square feet. Three of the company’s properties are currently in design stages or under development.

Easterly’s goal is to be the ‘partner of choice’ for the US government when it comes to providing buildings and facilities, and to that end, the company leases properties to a wide swath of government agencies. These include the FBI, the Department of Veteran Affairs, the DEA, the US Judiciary, the IRS, FEMA, the Forest Service, the FDA, the EPA – and even important government contractors such as Northrop Grumman.

Of interest to dividend investors, Easterly last declared its common share dividend payment on April 22. The payment was set at $0.45 per common share, and at that rate, the annualized dividend of $1.80 per common share gives a forward yield of 7.8%. The dividend is payable on May 21, later this week.

Easterly generated $91.55 million in revenue in 1Q26, for a year-over-year increase of more than 16% and beating the estimates by $3.27 million. The company’s Core FFO, a key metric that supports the dividend, came to 77 cents per share – more than enough to support the declared dividend payment.

This stock has caught the attention of Raymond James analyst RJ Milligan, who was upbeat enough to restart his coverage with a solid outlook.

“Our recommendation is based largely on valuation, with the stock trading at a 9.2% implied cap rate (~30% discount to NAV), 9x 2027E AFFO, and a well-covered 7.8% dividend yield. We believe the stock is still recovering from a post-D.O.G.E. and post-dividend cut hangover and will likely take time to regain momentum. However, with a refreshed strategy, insulation from the AI headline risk to office, and a path to de-leveraging, we believe DEA should/ will begin to close the valuation gap, opening up more accretive external growth opportunities,” Milligan opined.

To this end, Milligan gives DEA shares an Outperform (i.e., Buy) rating and a $26 price target, which suggest a 13% upside potential for the next 12 months. With the dividend yield added in, this stock can bring a return of nearly 21% on the one-year horizon. (To watch Milligan’s track record, click here)

While Raymond James is once again taking a bullish stance on the stock, Wall Street remains far more cautious overall. Based on 4 analyst reviews that include 1 Buy, 2 Holds, and 1 Sell, the REIT carries a Hold consensus rating. Meanwhile, the average price target of $24.33 suggests modest upside potential of about 6% from the current trading price of $23.02. (See DEA stock forecast)

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.