Top 12 Dividend Stocks for Investors to Watch in 2026

Investors are increasingly looking toward dividend stocks as reliable income sources, particularly as dividend payouts are expected to rise in 2026. According to a report from Bank of America, dividend growth is projected to increase by approximately 8% in 2026, compared to roughly 7% in 2025. Savita Subramanian, head of US equity and quant strategy at the bank, notes that dividend growth generally lags behind earnings growth by about three quarters. With the S&P 500 anticipated to conclude a robust earnings year in 2025, dividend increases are likely to follow.

The current dividend payout ratio for the S&P 500 stands at around 30%, near historic lows, which suggests that many companies have significant room to increase their payouts. Subramanian emphasizes a shift toward a total return environment, where dividends are expected to play a more pivotal role in total returns than they have in the past decade. In this context, she recommends focusing on companies that offer yields above the market average while maintaining sustainable payout levels.

Investment professionals are echoing this sentiment. Kevin Simpson, founder and chief investment officer of Capital Wealth Planning, emphasizes that he prefers dividend-paying stocks that raise their dividends as a result of genuine earnings growth rather than stretched balance sheets. This approach underpins the interest in identifying the most profitable dividend stocks for potential investment.

Criteria for Selection

In compiling this list, stable dividend companies were screened based on their historical growth in dividends. The selection criteria included a net profit margin exceeding 20% to indicate solid financial health, along with a net income of over $1 billion for the trailing twelve months. The companies are ranked by their net profit margins, providing insight into their relative profitability.

Top Dividend Stocks for 2026

1. **NextEra Energy, Inc. (NYSE:NEE)**
– Net Profit Margin: 20.04%
– Net Income TTM: $6.50 billion
On January 21, Morgan Stanley raised its price target for NextEra to $104, reflecting renewed confidence in the company. The firm highlighted NextEra’s commitment to clean energy projects, particularly through its Florida Power & Light subsidiary, which is set to implement a multiyear regulatory plan starting in 2026.

2. **CSX Corporation (NASDAQ:CSX)**
– Net Profit Margin: 20.55%
– Net Income TTM: $2.0 billion
Following a mixed fourth-quarter report, CSX’s price target was revised upward to $39. The company is focusing on cost management and operational efficiency under new CEO Steve Angel.

3. **Garmin Ltd. (NYSE:GRMN)**
– Net Profit Margin: 22.63%
– Net Income TTM: $1.57 billion
Barclays upgraded Garmin’s rating to Equal Weight and raised its price target to $217. The upgrade comes on the back of strong momentum in the wearables market and innovative collaborations, including a new in-vehicle control system developed with Meta.

4. **Atmos Energy Corporation (NYSE:ATO)**
– Net Profit Margin: 25.49%
– Net Income TTM: $1.20 billion
Morgan Stanley recently increased its price target for Atmos to $180. The company serves approximately three million customers across eight states and is well-positioned for steady returns.

5. **Canadian National Railway Company (NYSE:CNI)**
– Net Profit Margin: 26.89%
– Net Income TTM: $4.62 billion
Scotiabank raised its price target for Canadian National to C$163, emphasizing the company’s extensive rail network and strategic advantages in logistics.

6. **Johnson & Johnson (NYSE:JNJ)**
– Net Profit Margin: 27.26%
– Net Income TTM: $25.12 billion
Following solid fourth-quarter results, Guggenheim raised its price target for Johnson & Johnson to $240. The company’s strong guidance for 2026 continues to make it a favored choice among investors.

7. **Zoetis Inc. (NYSE:ZTS)**
– Net Profit Margin: 28.21%
– Net Income TTM: $2.65 billion
Despite a recent downgrade by Piper Sandler, Zoetis remains well-regarded for its diverse product portfolio and long-term growth strategies.

8. **Union Pacific Corporation (NYSE:UNP)**
– Net Profit Margin: 28.73%
– Net Income TTM: $7.05 billion
Following regulatory challenges regarding a merger proposal, Union Pacific’s prospects remain solid, and analysts continue to see potential for the company.

9. **M&T Bank Corporation (NYSE:MTB)**
– Net Profit Margin: 29.02%
– Net Income TTM: $2.63 billion
Truist raised M&T’s price target to $230, driven by strong performance in interest income and improvements in mortgage banking.

10. **Texas Instruments Incorporated (NASDAQ:TXN)**
– Net Profit Margin: 29.21%
– Net Income TTM: $5.02 billion
Analysts are optimistic about Texas Instruments as the semiconductor sector begins to stabilize, with increasing demand for chips in various industries.

11. **Moody’s Corporation (NYSE:MCO)**
– Net Profit Margin: 29.94%
– Net Income TTM: $2.24 billion
Following a solid quarter, Morgan Stanley raised Moody’s price target to $526, reflecting a strong demand for its data and analytics services.

12. **Abbott Laboratories (NYSE:ABT)**
– Net Profit Margin: 31.88%
– Net Income TTM: $13.98 billion
Despite recent setbacks, Abbott’s long-term growth drivers remain intact, prompting Evercore ISI to maintain an Outperform rating with a revised price target of $138.

Investors considering these dividend stocks should weigh their potential for income generation against overall market conditions and individual financial goals. As dividend payouts are set to rise, these companies may provide attractive opportunities for those seeking stability and growth in their portfolios.