Two S&P 500 Dividend Stocks Poised for Significant Growth, According to Wall Street Analysts

Key Insights

• Wall Street analysts project a 29% increase in Eli Lilly's share price, based on the average price target.

• Despite not raising its dividend payout in over a year, ConocoPhillips' stock is expected to climb by 22%, according to Wall Street forecasts.

• Both Eli Lilly and ConocoPhillips demonstrate a strong commitment to returning substantial cash to their shareholders.

Contrary to the common perception of dividend stocks as slow-growth investments, certain companies in this category are attracting bullish sentiment from Wall Street analysts. Currently, investment bank experts are particularly optimistic about two dividend-paying stocks, projecting returns exceeding 20% over the coming year.

While Eli Lilly (NYSE: LLY) and ConocoPhillips (NYSE: COP) may not offer the highest dividend yields at present, analysts believe they have significant growth potential. Wall Street price targets suggest these stocks could appreciate by 29% and 22%, respectively, in the next 12 months. Let's examine these companies more closely to assess their suitability for income-focused portfolios.

Eli Lilly: A Pharmaceutical Powerhouse

Eli Lilly's shares experienced a substantial decline from their previous peak, but Wall Street analysts anticipate a strong recovery. The consensus price target of $950.17 indicates a potential upside of over 29% from the recent trading price of $735 per share.

The recent stock price decline was primarily attributed to disappointing results from a clinical trial of orforglipron, Lilly's oral weight-management candidate. The highest tested dose resulted in an average weight reduction of 12.4% after 72 weeks of treatment. For context, Zepbound, Lilly's injectable weight-management drug, demonstrated a 20.9% weight reduction in similar patients over the same period.

Several analysts had correctly anticipated that orforglipron might not be a major success well before the company released the results last month. With the stock price having adjusted to this news, projecting gains based on Zepbound and the rest of Lilly's product portfolio becomes more feasible.

In the first half of 2025, total sales of tirzepatide, the active ingredient in both Zepbound (for obesity treatment) and Mounjaro (for diabetes treatment), surged by 121% year-over-year, reaching $14.7 billion.

The growth potential for tirzepatide appears substantial. Wall Street analysts' projections for global sales of tirzepatide and other drugs targeting glucagon-like peptide-1 (GLP-1) receptors are exceptionally high. For instance, BMO Capital Markets now estimates annual weight loss drug sales to reach $150 billion by 2033.

Eli Lilly's success extends beyond weight loss treatments. Sales of Verzenio, a breast cancer drug launched in 2017, increased by 11% year-over-year to $2.7 billion in the first half of 2025.

While Eli Lilly shares currently offer a modest 0.8% dividend yield, the company's track record of doubling its dividend payout over the past five years suggests potential for significant passive income growth in the future.

ConocoPhillips: Energy Giant with Strong Shareholder Focus

ConocoPhillips shares are currently trading about 30% below their all-time high set a few years ago. However, analysts covering the oil and gas giant anticipate a rebound. The current consensus target of $120.95 suggests a potential gain of approximately 28% from the recent stock price of about $95 per share.

Despite the stock's recent performance, ConocoPhillips' quarterly dividend payout of $0.78 per share represents a significant increase from 2023 levels and has remained stable for over a year. At current prices, it offers a 3.3% dividend yield.

The company's commitment to shareholder returns is evident in its capital allocation strategy. In the second quarter alone, ConocoPhillips spent $1.2 billion on share buybacks, $200 million more than it allocated to dividends. Since acquiring Marathon Oil last November, the company has already reduced its outstanding share count by 3.5%.

ConocoPhillips has maintained robust cash returns to investors despite oil prices hovering below $80 per barrel for over a year. The integration of Marathon Oil, upcoming asset sales, and anticipated tax benefits from recent legislation are expected to significantly boost the company's ability to distribute cash in the coming years. Management projects an increase in annual free cash flow of more than $7 billion over the next four years.

While an unexpected global economic downturn could potentially impact ConocoPhillips' free cash flow expansion plans, the company's well-funded dividend, currently yielding over 3%, makes it an attractive option for many investors. Adding ConocoPhillips shares to a diversified portfolio could be a prudent move in the current market environment.