In this article, we will take a look at the 13 Best Income Stocks With Highest Upside Potential.
According to a recent report by BlackRock, many retirees could be entering 2026 at a meaningful turning point. After a year marked by policy shifts, lower short-term yields, and record levels of cash savings, the income generated from safer assets has started to decline.
There is about $9.1 trillion currently held in money market funds worldwide. Still, cash is no longer delivering the income it once did, and BlackRock believes returns could fall further. The firm said this shift may create new opportunities. As the period of easy income fades, diversified income portfolios may offer more attractive yields and better long-term income stability. BlackRock said the US economy remains resilient, supported by both monetary and fiscal policy. Yields also remain relatively attractive compared with levels seen over the past decade. Despite this, retiree confidence has declined. Only 27% of retirees believe their savings will last through retirement, down from 43% three years ago. At the same time, two-thirds worry about running out of money. This gap between strong market conditions and personal financial concerns reflects the current investing environment.
The firm said the focus now should be on building portfolios designed for stability, income, and flexibility, rather than trying to predict every policy decision or market move. BlackRock said it continues to favor equities, with an emphasis on high-quality companies that generate consistent cash flow. In fixed income, the firm is maintaining shorter duration and focusing on higher-quality spread assets such as securitized credit, CLOs, and investment-grade corporate bonds. It believes these areas still offer attractive income relative to the risks involved.
The firm is also selectively reducing exposure to high-yield bonds, where spreads have tightened. It is reallocating capital toward areas that offer better compensation for risk. BlackRock added that periods of volatility can create opportunities to generate additional income. It uses covered call strategies to help convert equity market volatility into income, depending on investor goals and risk tolerance.
Given this, we will take a look at some income stocks with the biggest upside.
Our Methodology:
We used screeners to identify dividend stocks with an average upside potential of at least 20%, and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
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).
13. American Tower Corporation (NYSE:AMT)
Upside Potential as of February 28: 21.07%
On February 25, Scotiabank lowered its price recommendation on American Tower Corporation (NYSE:AMT) to $214 from $220. The firm reiterated an Outperform rating on the shares. The analyst said the company reported steady tower leasing activity and strong performance from CoreSite in the fourth quarter. Still, its guidance for 2026 came in softer than expected. The firm said it continues to view American Tower positively. This is based on its international asset base, strong balance sheet, and growing exposure to data centers.
During the Q4 2025 earnings call, CEO Steven Vondran described the year as highly successful. He said attributable AFFO per share, as adjusted, increased 8% for the full year. Growth accelerated in the fourth quarter, rising more than 13%. He said the performance was supported by steady leasing activity across both the tower and data center segments. He also pointed out that the company continued shifting capital toward developed markets and worked to reduce leverage back within its target range.
Vondran outlined three key priorities for 2026. These include maintaining revenue growth, improving operational efficiency, and continuing disciplined capital allocation. He said wireless carriers are expected to keep expanding and densifying their networks to support growing 5G demand. At the same time, they are beginning to prepare for the future transition to 6G technology. He also discussed the situation involving DISH. He said the company had defaulted on its payment obligations. Legal action is now underway as American Tower seeks to recover the remaining value tied to DISH’s lease commitments.
American Tower Corporation (NYSE:AMT) operates as a global real estate investment trust and is an independent owner, operator, and developer of multitenant communications real estate. Its portfolio includes nearly 150,000 communications sites and an extensive network of U.S. data center facilities.
12. NIKE, Inc. (NYSE:NKE)
Upside Potential as of February 28: 21.25%
On February 27, BNP Paribas reiterated an Underperform rating on NIKE, Inc. (NYSE:NKE). It set a $35 price target on the shares. The firm said that Pou Sheng, one of China’s two major sporting goods retailers, issued a profit warning overnight. The firm noted that it had already identified China as a concern three years ago when it downgraded Nike. It said those concerns continue to play out. BNP also said investors are questioning why Nike plans to report its Q3 results on April 2, instead of the usual third Thursday of March. The firm believes this timing could signal that Nike is preparing to announce a major restructuring program. BNP expects Adidas (ADDYY), which is scheduled to report full-year results next week, to continue showing strong trends in China. This contrast suggests that Nike may be facing company-specific challenges in the region.
On February 13, Nike also announced that its Board of Directors declared a quarterly cash dividend of $0.41 per share. The dividend applies to both Class A and Class B common stock. It will be paid on April 1, 2026, to shareholders of record as of March 2, 2026.
NIKE, Inc. (NYSE:NKE) designs, markets, and distributes athletic footwear, apparel, equipment, accessories, and related services. Its products are used across a wide range of sports and fitness activities.
