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.
11. Lam Research Corporation (NASDAQ:LRCX)
Upside Potential as of February 28: 22.1%
On February 25, Morgan Stanley analyst Shane Brett raised the firm’s price recommendation on Lam Research Corporation (NASDAQ:LRCX) to $254 from $244. The firm reiterated an Equal Weight rating on the shares. The firm also increased its wafer fab equipment market growth forecasts for 2026 and 2027 to 23% and 27%, up from prior estimates of 13% and 19%. The analyst said the upward revision reflects stronger expected spending on DRAM memory.
During the fiscal Q2 2026 earnings call, CEO Timothy Archer said Lam Research finished calendar year 2025 with revenue above the midpoint of its guidance range. He added that gross margins, operating margins, and earnings per share all exceeded the high end of the company’s expectations. He said the results reflected strong execution across the business. He highlighted the company’s leadership in deposition and etch technologies. These technologies play a key role in enabling semiconductor advancements tied to AI. He explained that they support important transitions, including gate-all-around transistor designs, backside power delivery, and 3D advanced packaging. He also said the company delivered record revenue of more than $20 billion and increased its share of the wafer fabrication equipment market. Its served available market share rose into the mid-30% range.
Archer also discussed the company’s Akara etch system. He said the installed base doubled over the past year, reflecting strong adoption. The system has seen growing use among advanced DRAM, foundry, and logic customers. He said adoption is expected to double again as customers move toward next-generation gate-all-around technologies.
He also noted progress in the Customer Support Business Group. The installed base exceeded 100,000 chambers. He said revenue from this segment grew faster than the increase in installed units, indicating higher service demand and improved monetization of the company’s expanding equipment base.
Lam Research Corporation (NASDAQ:LRCX) supplies wafer fabrication equipment and services to the semiconductor industry. The company designs, manufactures, markets, refurbishes, and services equipment used in the production of integrated circuits.
10. Brown & Brown, Inc. (NYSE:BRO)
Upside Potential as of February 28: 23.1%
On February 27, Mizuho upgraded Brown & Brown, Inc. (NYSE:BRO) to Outperform from Neutral. It raised the stock’s price target to $85 from $84. The firm made the change after adjusting ratings across the insurance property and casualty sector following the recent selloff. The analyst said insurance brokers that focus on middle-market and large accounts face a “low disruption threat” from AI. He also noted that disintermediation risk is “geared to mass market personal lines and the smaller end of SME.” This suggests that companies like Brown & Brown, which focus on larger clients, remain relatively well-positioned.
On February 17, J. Scott Penny, chief acquisitions officer of Brown & Brown, and Paul Bender, owner of The Protectorate Group Insurance Agency, announced that Brown & Brown Dealer Services acquired the assets of American Adventure Insurance. American Adventure provides insurance solutions at vehicle dealerships. Its coverage includes motor homes, travel trailers, campers, boats, personal watercraft, and motorcycles. The company also offers F&I products to automotive dealers and commercial insurance solutions.
Paul Bender leads American Adventure and brings more than 30 years of experience working with dealerships to provide insurance products directly to customers. The American Adventure team will join Brown & Brown Dealer Services and continue operating nationwide. Paul Bender and his team will report to Mike Neal, president of Brown & Brown Dealer Services.
Brown & Brown, Inc. (NYSE:BRO) is an insurance brokerage firm that provides customized insurance solutions. The company operates through more than 700 locations worldwide and employs over 23,000 professionals, serving customers across a wide range of industries.
9. CRH plc (NYSE:CRH)
Upside Potential as of February 28: 23.2%
On February 20, DA Davidson raised its price recommendation on CRH plc (NYSE:CRH) to $120 from $116. The firm reiterated a Neutral rating on the shares. The analyst said the firm updated its model to reflect recent acquisition activity and signs of improving stability in the company’s international business. The firm also pointed to CRH’s continued capital deployment. The analyst noted that the company remains active in investing across its operations, while its core business is showing more consistent performance.
During the Q4 2025 earnings call, CEO Jim Mintern said CRH delivered record financial results in 2025. He noted that the company achieved another year of double-digit growth in adjusted EBITDA. This also marked its 12th consecutive year of margin expansion. He said the results reflected disciplined capital allocation and the strength of its long-term growth strategy. Mintern also discussed the company’s investment activity. He said CRH deployed about $4.1 billion across 38 acquisitions during the year. In addition, the company invested $1.7 billion in growth-focused capital expenditures. He explained that CRH’s ability to invest in high-growth markets and integrate acquisitions effectively continues to support its performance.
The board also approved a quarterly dividend of $0.39 per share, representing a 5% increase from the previous year. The company announced a new $300 million share repurchase authorization. These actions reflect its continued focus on returning capital to shareholders while supporting future growth.
CRH plc (NYSE:CRH) is an Ireland-based building materials company. It manufactures and distributes a wide range of construction products used in projects of various sizes. The company operates across three segments within two divisions.
8. Constellation Energy Corporation (NASDAQ:CEG)
Upside Potential as of February 28: 27.5%
On February 27, TD Cowen raised its price recommendation on Constellation Energy Corporation (NASDAQ:CEG) to $454 from $440. The firm reiterated a Buy rating on the shares. The firm said that while the company’s guidance remains strong, it expects contracting activity to accelerate in 2026. The analyst also pointed to positive developments in the PJM market. These include the reliability backstop auction and the new non-firm tariff structure. The firm said these changes could bring more electricity demand online than previously expected.
On February 24, Constellation reported fourth-quarter adjusted profit that exceeded Wall Street estimates. The results were supported by rising electricity demand, particularly from data centers. Much of this increase has been driven by AI and crypto data center expansion, along with broader electrification trends across homes and businesses. The company recently signed an agreement with CyrusOne to connect and serve a new data center near the Freestone Energy Center in Texas. It also reached agreements with Meta to keep one of its nuclear reactors in Illinois operating for another 20 years. In addition, Constellation signed a deal with Microsoft to restart a nuclear reactor at a Pennsylvania facility formerly known as Three Mile Island.
Constellation’s nuclear fleet produced 45,459 gigawatt-hours of electricity during the period, slightly down from 45,494 gigawatt-hours a year earlier. The decline was due to an increase in planned refueling and maintenance outages. In January, the company completed its $16.4 billion acquisition of Calpine Corp., a natural gas and geothermal energy provider. The deal expands Constellation’s generation portfolio and strengthens its position in the energy market.
Constellation Energy Corporation (NASDAQ:CEG) produces emissions-free energy and supplies power to businesses, homes, and public sector customers across the United States. Its nuclear, hydro, wind, and solar facilities have the capacity to power about 16 million homes and account for roughly 10% of the nation’s clean energy generation.
7. Arthur J. Gallagher & Co. (NYSE:AJG)
Upside Potential as of February 28: 28.3%
On February 27, Mizuho upgraded Arthur J. Gallagher & Co. (NYSE:AJG) to Outperform from Neutral. It set a price target of $260, down from $277. The firm made the change after adjusting ratings across the insurance property and casualty sector following the recent selloff. The analyst said insurance brokers that focus on middle-market and large clients face a “low disruption threat” from AI. He also noted that disintermediation risk is “geared to mass market personal lines and the smaller end of SME.” This suggests companies like Arthur J. Gallagher, which serve larger commercial clients, are less exposed to these risks.
On February 26, Arthur J. Gallagher announced the acquisition of Krose GmbH & Co KG, a commercial insurance and reinsurance brokerage based in Bremen, Germany. Founded in 1920, Krose provides insurance solutions for corporate clients across Germany and focuses on designing and placing complex insurance programs. Krose’s team works across several areas, including property, casualty, cyber, marine, D&O, and alternative risk solutions. The team will join Gallagher’s brokerage operations in Europe, expanding its capabilities and presence in the region.
Arthur J. Gallagher & Co. (NYSE:AJG) is a global insurance brokerage, risk management, and consulting firm headquartered in Rolling Meadows, Illinois. The company operates in about 130 countries through its own offices and a network of partner brokers and consultants.
6. The Carlyle Group Inc. (NASDAQ:CG)
Upside Potential as of February 28: 31.3%
On February 27, TD Cowen raised its price recommendation on The Carlyle Group Inc. (NASDAQ:CG) to $67 from $65. It reiterated a Buy rating on the shares. The firm attended the company’s investor day and said the business appears to be moving into a stronger phase after a period of restructuring. The analyst said Carlyle now seems better positioned for improved execution. The firm also said the company’s path to more than $6 in distributable earnings by 2028 appears both achievable and conservative based on current plans.
On February 26, Reuters reported that Carlyle is targeting $200 billion in new capital by the end of 2028. The goal is to increase earnings generated from managing these assets. CEO Harvey Schwartz, who took the role three years ago, said he had “systematically reshaped” the company as part of its turnaround effort. Schwartz, a former Goldman Sachs executive, also noted that Carlyle’s Washington, D.C. location gives it an advantage in areas such as aerospace and defense investing. The firm’s capital raising target would exceed the $158 billion it raised between 2023 and 2025. Carlyle currently manages about $477 billion in total assets.
The company said about $90 billion of the targeted capital would come from credit strategies. Another $60 billion is expected from the AlpInvest secondaries business, and $50 billion from private equity funds. Carlyle also expects fee-related earnings to reach $1.9 billion by 2028, up from $1.2 billion in 2025. These earnings provide stable income for the firm and reflect the growth of its asset management platform.
The Carlyle Group Inc. (NASDAQ:CG) operates as a global investment firm. Its business includes Global Private Equity, Global Credit, and Carlyle AlpInvest. The Global Private Equity segment manages buyout, growth, real estate, infrastructure, and natural resources funds.
5. Agilent Technologies, Inc. (NYSE:A)
Upside Potential as of February 28: 36.5%
On February 27, Goldman Sachs lowered its price recommendation on Agilent Technologies, Inc. (NYSE:A) to $150 from $170. The firm reiterated a Buy rating on the shares. The analyst said the revision reflects the company’s Q1 earnings and revenue, which came in below consensus expectations. Goldman said it still expects the CAM end market to benefit from strong underlying trends, particularly in semiconductors. The firm also remains focused on Agilent’s ability to accelerate growth in its Life Sciences and Diagnostics Markets Group and improve overall margins during the rest of the year.
During the fiscal Q1 2026 earnings call, CEO Padraig McDonnell said the company generated $1.8 billion in revenue. This represented 4.4% core growth and fell within the range of its November guidance. He said overall market conditions were mostly in line with expectations, although a winter storm in the U.S. during the final week of January temporarily affected results. He noted that the storm reduced revenue by about $10 million, though most of that impact was recovered in early February. He also said operating margins reached 24.6%, which met expectations and provided a stable base for the rest of the fiscal year.
McDonnell highlighted three key priorities supporting performance and future growth. He pointed to the company’s service organization, which helps strengthen customer relationships and improve retention. He also noted continued product innovation, including the Altura column portfolio and the Pro iQ LC/MS platform, which are expanding the company’s capabilities. He also discussed the Ignite Operating System and said it delivered meaningful financial benefits in its first year. The program helped improve pricing execution, reduce procurement costs, streamline the organization, and support efforts to manage tariff-related pressures.
Agilent Technologies, Inc. (NYSE:A) focuses on life sciences, diagnostics, and applied markets. The company provides instruments, software, services, and consumables that support laboratory workflows across a wide range of industries.
4. Fidelity National Information Services, Inc. (NYSE:FIS)
Upside Potential as of February 28: 40.19%
On February 25, Baird lowered its price recommendation on Fidelity National Information Services, Inc. (NYSE:FIS) to $54 from $82. It reiterated a Neutral rating on the shares. The firm made the change after updating its model to reflect the company’s Q4 results.
During the Q4 2025 earnings call, CEO Stephanie Ferris said the company met and exceeded several key financial goals for the year. She reported that adjusted revenue growth came in above expectations and that adjusted EPS reached $5.75. She also pointed to the company’s long-term goal of doubling cash flow within three years to more than $3 billion, signaling confidence in its growth outlook.
Ferris said the company is positioned to benefit from several industry trends. She noted strong performance across the banking sector, increased adoption of AI technologies, and rising technology spending by financial institutions. She said these trends are creating opportunities for the company to expand its presence within the financial services ecosystem. She also highlighted the company’s competitive advantages. She said its proprietary data assets cover the full financial lifecycle, which helps support its products and services. In addition, she said its regulatory and compliance infrastructure represents a significant barrier to entry and supports its long-term competitive position.
Fidelity National Information Services, Inc. (NYSE:FIS) operates as a financial technology company. It provides solutions to financial institutions, businesses, and developers through its Banking Solutions, Capital Market Solutions, and Corporate and Other segments.
3. Apollo Global Management, Inc. (NYSE:APO)
Upside Potential as of February 28: 41.4%
On February 24, RBC Capital analyst Bart Dziarski initiated coverage of Apollo Global Management, Inc. (NYSE:APO) with a Sector Perform rating. The analyst set a $142 price target on the stock. The analyst said the company’s current valuation and consensus estimates already reflect its accelerating earnings growth. RBC said valuation was the main reason for assigning a neutral rating.
During the Q4 2025 earnings call, CEO Marc Rowan said Apollo delivered record financial results. Combined fee-related earnings and spread-related earnings reached $5.9 billion. He also reported adjusted net income of $5.2 billion, or $8.38 per share, reflecting strong performance across the business. Rowan said fee-related earnings totaled $2.5 billion for the year, representing a 23% increase compared with the prior year. Spread-related earnings reached $3.4 billion on a normalized basis, rising 9% year over year. He said the company’s performance was supported by strong activity levels and favorable market conditions.
He also highlighted record origination activity, with volume exceeding $300 billion. He said spreads remained strong, and capital formation reached record levels as well. The company generated $228 billion in inflows across its Athene and Asset Management platforms, marking the third straight year of record inflows. Rowan also discussed the company’s expansion beyond its traditional institutional investor base. He said Apollo now serves six different markets, including individual investors, insurance clients, institutional debt and equity investors, traditional asset managers, and the 401(k) market.
Apollo Global Management, Inc. (NYSE:APO) operates as a global alternative asset manager and retirement services provider. Its business includes Asset Management, Retirement Services, and Principal Investing segments.
2. TPG Inc. (NASDAQ:TPG)
Upside Potential as of February 28: 47.99%
On February 24, BofA lowered its price recommendation on TPG Inc. (NASDAQ:TPG) to $72 from $77. The firm maintained a Buy rating on the shares. BofA said the change reflects updated EPS estimates across several brokers, asset managers, and exchanges that recently reported earnings.
On February 6, Reuters reported that TPG agreed to acquire a majority stake in Sabre Industries from Blackstone. The deal values the power infrastructure company at about $3.5 billion, according to people familiar with the matter. Blackstone will retain a significant minority stake in Sabre, which is based in Texas. The company manufactures components used in electricity and communications infrastructure. Sabre employs about 2,800 people, and its largest business is tied to utility infrastructure. Blackstone originally acquired Sabre in 2021, and TPG’s purchase price represents a fourfold increase in value since that investment.
The report also noted that demand for infrastructure supporting AI and cloud computing continues to grow. The expansion of data centers has attracted significant private investment and is expected to require additional capital in the coming years.
TPG Inc. (NASDAQ:TPG) operates as an alternative asset management firm. The company invests across multiple strategies, including private equity, impact investing, credit, real estate, and market solutions.
1. Marvell Technology, Inc. (NASDAQ:MRVL)
Upside Potential as of February 28: 51.5%
On February 24, TD Cowen analyst Joshua Buchalter lowered the firm’s price recommendation on Marvell Technology, Inc. (NASDAQ:MRVL) to $85 from $100. He reiterated a Hold rating on the shares ahead of earnings. The analyst said investment in AI infrastructure continues to increase, and expectations remain strong. He noted that these trends should support semiconductor estimates in 2026 and 2027. At the same time, share valuations have declined, which TD Cowen believes could create opportunities. The firm said it remains constructive on companies involved in compute and networking.
On February 2, Marvell announced it had completed its acquisition of Celestial AI, a company focused on optical interconnect technology. This technology is designed to support high-speed, low-latency connectivity for large-scale AI systems. The acquisition expands Marvell’s capabilities in AI and cloud data center infrastructure.
Marvell expects the acquisition to begin contributing revenue in the second half of fiscal 2028. The company projects growth to a $500 million annualized run rate by late fiscal 2028, with revenue reaching $1 billion annually by fiscal 2029. The deal will increase operating expenses by about $50 million per year. Marvell also used $1 billion in cash to complete the acquisition, which will reduce its interest income. In addition, the company issued new shares, increasing its total share count by about 27 million.
Marvell Technology, Inc. (NASDAQ:MRVL) provides semiconductor solutions for data infrastructure. The company designs, develops, and sells integrated circuits used across data centers and network infrastructure.
While we acknowledge the potential of MRVL to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MRVL and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 13 Best Performing Long Term Stocks to Invest In and 13 Best March Dividend Stocks to Buy
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
