In this article, we will take a look at some of the most profitable stocks to invest in 2026.
Dividend stocks have been part of portfolios for a long time, and they are getting renewed attention again. Bank of America expects dividend payouts to move higher in 2026.
Savita Subramanian, the firm’s head of US equity and quant strategy, pointed to a familiar timing pattern. Dividend growth typically trails earnings growth by roughly three quarters. With the S&P 500 likely coming off a strong year for earnings in 2025, dividend increases should follow. She is forecasting dividend growth of about 8% in 2026, up from roughly 7% in 2025.
In a note published on December 31, Subramanian said companies still have plenty of room to raise payouts. The S&P 500 dividend payout ratio sits near a record low of around 30%, which gives management teams flexibility. She also argued that markets have shifted into more of a total return environment, where dividends are likely to play a bigger role in returns than they did over the past decade. In that setting, she favors companies offering yields above the market average without pushing payout levels too far.
Kevin Simpson, founder and chief investment officer of Capital Wealth Planning in Naples, Florida, takes a similar view. He sees dividend-paying stocks as a way to generate income throughout the year, which makes them particularly appealing in the current market. His focus is on businesses that raise dividends because earnings are growing, not because balance sheets are being stretched.
Given this, we will take a look at some of the most profitable dividend stocks.
Our Methodology:
For this list, we screened for stable dividend companies that have strong dividend growth track records. From that group, we picked companies with a net profit margin exceeding 20%, which suggests sound financial health and excellent cost management. Next, we shortlisted companies with net income for the trailing twelve-month period above $1 billion. The stocks are ranked in ascending order of their net profit margin as of the trailing twelve-month period.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
12. 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 on NextEra Energy, Inc. (NYSE:NEE) to $104 from $95 and kept an Overweight rating. The firm said the move comes as it refreshes its view on regulated and diversified utilities and independent power producers across North America. Utilities lagged the S&P 500 in December, the analyst noted, which has reset expectations across the group.
The stock also picked up support from other analysts as well. In a January 20 report published by CNBC, Sean Russo of Ritholtz Wealth Management pointed to several strengths in NextEra’s business.
Russo said the company’s long-standing push into clean energy continues to pay off. Florida Power & Light has locked in a multiyear regulatory plan starting in 2026, with an allowed return on equity of about 11%. That agreement gives investors clearer visibility into regulated cash flows while still leaving room to keep investing in solar and battery projects.
He further said that at the same time, NextEra Energy Resources is adding momentum on the growth side. The unit has signed large renewable and storage deals with major technology companies, including Alphabet and Meta. The company expects roughly 15 gigawatts of incremental power demand tied to AI customers by 2035.
NextEra Energy, Inc. (NYSE:NEE) is an electric power and energy infrastructure company. Its operations run through Florida Power & Light and its energy resources and transmission businesses, which together form the core of its regulated and renewable platforms.
11. CSX Corporation (NASDAQ:CSX)
Net Profit Margin: 20.55%
Net Income TTM: $2.0 Billion
On January 23, Susquehanna lifted its price target on CSX Corporation (NASDAQ:CSX) to $39 from $38 and kept a Neutral rating. The update came after the company’s fourth-quarter results. Under new CEO Steve Angel, the firm said CSX is focusing on the basics that tend to matter over time, including lower costs, better returns on invested capital, and stronger cash flow. If management delivers, that groundwork could also improve long-term strategic flexibility.
CSX reported its earnings a day earlier, and the quarter was mixed. Revenue and profit both missed expectations as weaker industrial demand and lower export coal volumes offset pricing gains and solid intermodal traffic. That backdrop is not unique to CSX. Rail operators across the US have been dealing with soft industrial activity and uneven freight volumes, forcing a sharper focus on expenses and operating efficiency.
CEO Steve Angel said the quarter reflected that environment, along with steps already taken to adjust the cost base. He added that the company plans to lean harder into productivity, cost control, and capital discipline in 2026.
Management also forecast operating margin expansion of 200 to 300 basis points in 2026 compared with adjusted 2025 levels. That outlook was enough to lift the stock about 3.2% in extended trading.
CSX posted an operating margin of 31.6% for the quarter, up 30 basis points from a year earlier. Revenue totaled $3.50 billion, falling short of the $3.54 billion analysts were expecting.
CSX Corporation (NASDAQ:CSX) is a transportation company that provides rail, intermodal, and rail-to-truck transload services across its network.
