Investors are increasingly looking towards dividend-paying stocks as a strategy for growth and income in 2026. According to a recent analysis by Bank of America, dividend payouts are expected to rise, driven by a projected earnings growth surge for the S&P 500 in 2025. Savita Subramanian, the head of US equity and quant strategy at the bank, forecasts a dividend growth of approximately 8% in 2026, an increase from around 7% in the previous year. This trend suggests a favorable environment for dividend stocks, which have been gaining renewed attention from investors.
Subramanian highlighted that the current S&P 500 dividend payout ratio is near an all-time low of about 30%, indicating that many companies still have room to enhance their dividend payouts. She emphasized that as the market shifts toward a total return focus, dividends will likely become an important component of overall investment returns. This perspective resonates with Kevin Simpson, founder and chief investment officer of Capital Wealth Planning, who views dividend stocks as a reliable source of income, particularly in a market where earnings are on the rise.
To identify the most promising dividend stocks for 2026, a selection methodology was employed, targeting stable companies with strong dividend growth histories. The screening criteria focused on firms with a net profit margin exceeding 20% and net income surpassing $1 billion over the trailing twelve months. Below are the twelve stocks poised for growth.
Highlighted Dividend Stocks for 2026
NextEra Energy, Inc. (NYSE: NEE) tops the list with a net profit margin of 20.04% and a net income of $6.50 billion. Following a price target upgrade by Morgan Stanley to $104, analysts noted that the company’s commitment to clean energy and its regulatory agreements provide a stable outlook.
CSX Corporation (NASDAQ: CSX) comes next, boasting a net profit margin of 20.55% and net income of $2 billion. A recent price target increase by Susquehanna indicates confidence in the company’s operational improvements under new CEO Steve Angel, despite a challenging industrial environment.
Garmin Ltd. (NYSE: GRMN) has a net profit margin of 22.63% with a net income of $1.57 billion. The company received an upgrade from Barclays, which cited its diversified business lines and ongoing momentum in the wearables market.
Another promising stock is Atmos Energy Corporation (NYSE: ATO), with a net profit margin of 25.49% and a net income of $1.20 billion. Morgan Stanley has raised its price target to $180, reflecting the company’s robust regulatory framework and operational scale.
Canadian National Railway Company (NYSE: CNI) has a net profit margin of 26.89% and a net income of $4.62 billion. With an extended rail network across Canada and into the US, it remains a strategic asset for transportation logistics. Scotiabank recently raised its price target to C$163.
Johnson & Johnson (NYSE: JNJ) is another standout, featuring a net profit margin of 27.26% and net income of $25.12 billion. Following an upward revision of its price target by Guggenheim to $240, analysts expect the company to maintain its position as a leader in biopharma, despite facing headwinds from pricing agreements.
Zoetis Inc. (NYSE: ZTS) has a net profit margin of 28.21% with a net income of $2.65 billion. Despite a downgrade from Piper Sandler, the company’s diverse product pipeline positions it well for future growth.
Union Pacific Corporation (NYSE: UNP) shows a net profit margin of 28.73% and net income of $7.05 billion. Despite regulatory hurdles concerning a proposed merger, analysts remain optimistic about its long-term prospects.
M&T Bank Corporation (NYSE: MTB) has a net profit margin of 29.02% and net income of $2.63 billion. Following a positive earnings report, Truist lifted its price target to $230, reflecting the bank’s solid performance.
Texas Instruments Incorporated (NASDAQ: TXN) features a net profit margin of 29.21% and net income of $5.02 billion. The company is poised for growth as demand for its semiconductor products increases, especially in the AI sector.
Moody’s Corporation (NYSE: MCO) rounds out the list with a net profit margin of 29.94% and net income of $2.24 billion. The company continues to show resilience with a long-standing commitment to shareholder returns.
Abbott Laboratories (NYSE: ABT) leads with a net profit margin of 31.88% and net income of $13.98 billion. Even after a recent stock decline due to quarterly misses, analysts still see growth potential driven by various business segments.
These dividend stocks offer promising prospects as companies leverage their financial strength to expand payouts. Investors are encouraged to consider these options as part of a diversified portfolio in the upcoming year.
