Stocks to buy

3 Dividend Stocks Targeting at Least 25% Upside by 2026

Dividend stocks are a great way for investors to diversify their investment portfolios. After all, you do not have to approach investing with only a growth-focused mindset. Millions of income-oriented investors can achieve the financial success they’re looking for. 

As we navigate exciting and challenging economic times, a steady income stream through dividends becomes more appealing. Having multiple income streams during periods of high inflation can help safeguard the rising cost of living. These compelling dividend stocks showcase resilient business fundamentals while consistently returning cash to shareholders.  

Now, let’s unpack the three best dividend stocks with upside through 2026.

UnitedHealth Group (UNH)

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UnitedHealth Group (NYSE:UNH) is an American multinational health insurance and service company headquartered in Minnetonka, Minnesota. They are one of the most compelling dividend stocks with upside through 2026.

The company is closing off a strong 2023 fiscal year thanks to strong double-digit growth at both Optum and UnitedHealthcare. For FY23, UnitedHealth Group’s revenue grew 15% YOY to $371.6 billion. Operating income increased 13.8% to $32.4 billion as growth continued across all business segments. 

FY23 EPS was $25.12 per share, above the revised guided estimates in Q3 2023. This reflected the company’s strong execution, translating into approximately 19% YOY growth. Furthermore, the company returned $14.8 billion to shareholders through share repurchases and dividends. This makes UnitedHealth Group one of the best dividend stocks to buy for 2024.

Deere & Company (DE)

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Deere & Company (NYSE:DE) is one of the best dividend stocks to consider for 2024. This company has exhibited robust financial performance and showcased its ability to consistently return cash to shareholders. 

Deere has been able to weather the storm of ongoing supply chain constraints in the infrastructure equipment market in 2023. Wall Street was wary about the company’s growth prospects with construction activity seeing a broader slowdown. However, the company continued to beat on revenue and EPS while raising its guidance for fiscal 2023. 

In their FY23 financial results, Deere’s revenue grew 16.5% YOY to $61.25 billion. The company delivered a record EPS of $34.63 per share, up nearly 50% from 2022. Furthermore, they recently raised their quarterly dividend 9% to $1.47 per share. With the Infrastructure and Jobs Act in full swing, Deere is one of the top cheap dividend stocks that you should keep on your radar.

Lowe’s Companies (LOW)

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Lowe’s Companies (NYSE:LOW) is an American home improvement retailer headquartered in Mooresville, North Carolina. The company has exemplified an extraordinary track record of dividend growth for 52 consecutive years. 

The 2023 fiscal year has been much slower than what the market was expecting. Higher interest rates and inflation slowed down construction activity and demand for materials which has impacted revenue and comparable sales growth. However, with interest rates projected to come down in 2024, now could be a great time to take a closer look. 

In Q3 2023, revenue was down 13% YOY to $20.5 billion. Additionally, comparable sales declined 7.4%, due to a decline in DIY discretionary spending. The company projects both a decline in revenue and operating income for fiscal 2023. But this slowdown will not be forever, and Lowe’s can see a complete turnaround as macroeconomic conditions become more favorable. With a 17% CAGR in its dividend over the last decade, now could be a great time to scoop up shares of this dividend aristocrat for the long term. 

On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Terel Miles is a contributing writer at InvestorPlace.com, with more than seven years of experience investing in the financial markets.

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