Conagra Brands remains out of favor on Wall Street, but the successful execution of its recently announced AI-driven turnaround plan could fuel a turnaround for the packaged food company.
If interest rates continue to decline in 2026, Realty Income, a REIT with a long history of dividend growth, could experience a significant upside revaluation.
The increased cash flow indicates safe dividend and share price growth for the mid-sized energy company Oneok’s stock.
10 Stocks We Like More Than Conagra Brands ›
I’m a fan of dividend stocks where you buy for the yield but stay on the upside. In other words, dividend stocks that offer a high forward dividend yield but at the same time have the potential to experience high levels of price appreciation.
Sure, it can seem almost impossible to get the best of both worlds. Many times, you’ll buy high-yielding dividend stocks only to find that you own a yield trap, where the losses in the stock price outweigh the quarterly cash payments.
However, as always, there are exceptions to the rule. That’s the story with the following three dividend stocks: Conagra Brands(NYSE: CAG), Real estate income(NYSE:O)and One ok(NYSE: OK). Not only could each maintain its dividend for years to come, but over the next three years, each could make a big move higher.
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Shares of packaged food company Conagra Brands are down more than 37% year to date. As has been the case for many of its competitors, Conagra has faced the impact of high inflation and low growth on its fiscal performance.
This drop in price, along with the company’s relatively high debt position, has left investors concerned about the company’s future prospects, including its quarterly dividend of $0.35 per share. That payout level, annualized, gives the stock a forward yield of 8.0%, but there are growing concerns about a potential dividend cut. However, these concerns may prove to be overblown, thanks to the recently announced “Project Catalyst” initiative.
Project Catalyst, which uses artificial intelligence (AI) technology to identify areas for operational improvement, could significantly improve the company’s profitability. In turn, this could secure the dividend and generate a rebound for the stock. The stock, which currently trades for just 10 times forward earnings, could rise in line with earnings growth as well as valuation expansion.
Realty Income, best known as a real estate investment trust (REIT) that pays monthly dividends, produced only modest gains in 2025, largely due to uncertainty about the potential for further interest rate cuts by the Federal Reserve.
Yes, the Fed’s latest minutes from the central bank suggest further uncertainty about rate cuts. Fed officials remain divided on whether it is appropriate to keep rates lower as inflation remains at high levels. However, if the latest consumer price index (CPI) showing easing inflation turns out to be the start of a trend, the Fed could reconsider its current view and proceed with further interest rate cuts.
REITs are very sensitive to changes in interest rates. If interest rates continue to decline in the coming years, this could lead to a re-rating of this popular REIT stock. Right now, Realty Income has a forward dividend yield of 5.7%. However, during periods of lower interest rates, Realty Income has had a dividend yield of up to 3.3%. Even if the REIT’s forward yield fell to 4% to 4.5%, that would mean substantial upside for the stock.
Oneok, a midstream energy company, is another strong turnaround contender among high-yield stocks. The stock currently has a forward dividend yield of 5.6%. With a payout ratio of around 76%, there are concerns about Oneok’s dividend sustainability.
However, as with Conagra, concerns about the dividend cut may be an overreaction. This stock may also have high stock appreciation potential. Here’s how. First, Oneok has made some big acquisitions in recent years. By building its pipeline and energy storage infrastructure portfolio, the company is starting to generate cost synergies from these acquisitions.
Recently completed organic growth projects are also starting to contribute to earnings. With earnings rising, not only is Oneok’s dividend safe, but the company is also putting its increased cash flow to work through debt reduction and share buybacks. Together, all these efforts could have a tremendously positive impact on the share price.
Before buying stock in Conagra brands, consider the following:
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Thomas Niel has no position in any of the shares mentioned. The Motley Fool has positions and recommends Realty Income. The Motley Fool recommends Oneok. The Motley Fool has a disclosure policy.
3 Dividend Stocks to Hold for the Next 3 Years was originally published by The Motley Fool
