3 high-yield dividend stocks Wall Street says still have upside

High-yield dividend stocks often come with a warning.

A rising yield can signal that a falling share price is exposing doubts about earnings, debt or whether the payout can be maintained.

Wall Street nevertheless sees more than income in AT&T, Energy Transfer and UPS.

Based on their latest prices and declared quarterly payouts, the three offer indicative annual yields of roughly 4.8% to 6.6%.

Recent analyst targets also point to potential share-price gains, although those forecasts exclude dividends and are not guaranteed returns.

AT&T stock: Cash flow supports a 4.8% yield

AT&T’s quarterly dividend of $0.2775, or $1.11 annually, implies a yield near 4.8% at a share price of $22.96.

The payout gained support from second-quarter results. AT&T generated $4.7 billion of free cash flow, added 432,000 postpaid phone customers and reported revenue of $31.6 billion.

The company also recorded 646,000 advanced-connectivity internet additions, strengthening the argument that combining mobile and fibre services can reduce customer departures.

Wolfe Research analyst Peter Supino upgraded AT&T to Outperform and set a $29 target, implying about 26% upside.

Barron’s reported that he expects adjusted earnings per share to grow around 11% annually and said that growth is not “priced into today’s near-trough valuations”.

Supino also argued that SpaceX’s Starlink would need years and substantial spectrum resources to recreate a nationwide mobile network.

AT&T remains capital intensive and carries significant debt. Its appeal is therefore built on dependable cash generation and income rather than rapid growth.

Energy Transfer stock: A 6.6% yield with expansion potential

Energy Transfer pays $0.3375 per unit quarterly, equivalent to $1.35 annually and an indicative 6.6% yield at $20.42. The distribution increased more than 3% from a year earlier.

RBC Capital analyst Elvira Scotto raised her target to $23 from $21 and retained an Outperform rating, implying roughly 13% price upside before distributions.

In commentary reported by The Fly, Scotto expected “strong Q2 results” across US midstream companies, supported by commodity prices, regional gas spreads and export cargoes.

She also highlighted rising natural-gas and power demand, together with the need for additional infrastructure supporting US energy exports.

Energy Transfer operates 140,000 miles of pipelines and expects to invest $5 billion to $5.5 billion in 2026 growth projects, mainly across its natural-gas network.

The caveats are leverage, project execution and regulatory exposure. Energy Transfer is also a master limited partnership, bringing tax complexity that dividend investors may not want.

UPS stock: A 5.7% yield attached to a turnaround

UPS’s $1.64 quarterly dividend, or $6.56 annually, yields about 5.7% at $114.10.

Bernstein analyst David Vernon raised his target to $133 from $130 and maintained an Outperform rating.

That suggests approximately 17% upside before dividends.

The Fly reported that Vernon expects a “modest beat” when UPS reports on July 28, although “visibility into the second half” remains a concern.

The bullish thesis rests on network rationalisation, workforce reductions and UPS’s withdrawal from lower-margin Amazon packages.

Management has called 2026 an inflection year and expects revenue, operating profit and margins to improve after the volume reduction is completed.