In this article, we will take a look at the Top 10 Income Stocks with the Highest Upside Potential.
Growth is often the primary objective of an investment strategy. Yet for many investors, income-producing investments can be just as important, if not more so, depending on their financial goals. A steady stream of portfolio income can help cover retirement expenses, fund the purchase of a second home, contribute to a child’s or grandchild’s education, and support a range of other long-term objectives.
Building an income-focused portfolio requires careful planning and a different way of thinking about investments. Matthew Diczok, head of fixed income strategy in the Chief Investment Office for Merrill and Bank of America Private Bank, made the following statement:
“Investing for income requires you to think differently about your assets, especially in volatile interest-rate environments.”
Dividend-paying stocks and bonds can both play an important role in generating income. By providing regular payments to shareholders, dividend stocks can offer a reliable source of cash flow. While share prices can fluctuate based on a company’s financial performance and outlook, these stocks also have the potential to appreciate in value while continuing to pay dividends. Diczok notes that dividend-paying stocks may be particularly well-positioned in the current market environment. “If, as expected, the market becomes less concentrated in just a few stocks, high-quality dividend stocks could benefit,” he says. No matter the strategy, Diczok emphasizes the importance of diversification. “Make sure that your portfolio includes a range of income sources that are appropriate for your goals, timelines and risk tolerance,” he added.
Given this, we will take a look at some of the best income stocks with the biggest upside.
Photo by Dan Dennis on Unsplash
Our Methodology:
For this list, we screened for companies that have consistent dividend policies, strong balance sheets, and sound financials. From that list, we identified stocks with analyst upside potential over 15%, as of June 14. We limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment.
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. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10. The Sherwin-Williams Company (NYSE:SHW)
Analayt Upside Potential: 17.99%
On June 4, BMO Capital reduced its price recommendation on The Sherwin-Williams Company (NYSE:SHW) to $355 from $420. It reiterated an Outperform rating on the shares. The firm said it is lowering its estimates to account for a tougher macroeconomic backdrop. The analyst pointed to continued pressure from elevated raw material costs and a weaker housing market, which is reducing the likelihood of a meaningful recovery in the later stages of fiscal 2026 and fiscal 2027.
A few days later, on June 8, Berenberg analyst Aron Ceccarelli lowered the firm’s price goal on SHW to $380 from $400 while reiterating a Buy rating. The change followed meetings with the company’s management team.
The Sherwin-Williams Company (NYSE:SHW) manufactures, develops, distributes, and sells paints, coatings, and related products. Its customers include professional, industrial, commercial, and retail buyers. The company generates most of its business in North and South America, while also operating in the Caribbean, Europe, Asia, and Australia.
9. Donaldson Company, Inc. (NYSE:DCI)
Analayt Upside Potential: 18.87%
On June 4, Stifel lowered its price recommendation on Donaldson Company, Inc. (NYSE:DCI) to $91 from $96. It reiterated a Hold rating on the shares. The firm updated its estimates after the company reported a fiscal Q3 earnings beat and narrowed its organic growth guidance.
During the fiscal Q3 2026 earnings call, President, CEO, COO, and Director Richard Lewis described the quarter as a strong one for Donaldson. He said results improved significantly from the second quarter, in line with management’s expectations. Lewis added that it was the strongest quarter in the company’s history based on sales, adjusted operating margin, and adjusted earnings per share.
Lewis also said Donaldson continued to make progress on its cost structure initiatives. The company closed the final two facilities identified under its footprint optimization program and has now turned its focus to increasing production at the locations, taking on those operations. On the strategic front, Lewis noted that Donaldson completed its acquisition of Facet Filtration after the quarter ended. He said the deal strengthens the company’s position in the aftermarket business, with about 70% of Facet’s revenue coming from recurring sales of regulated replacement parts that generate attractive margins.
Chief Financial Officer Brad Pogalz reported that total sales increased 6% year over year, while adjusted EPS rose 7% to $1.06. He also highlighted that third-quarter operating margin reached 16.6%, up 30 basis points from a year earlier and the highest level in Donaldson’s history.
Donaldson Company, Inc. (NYSE:DCI) develops technology-driven filtration products and solutions for a wide range of industries and advanced markets. The company’s operations are organized into three segments: Mobile Solutions, Industrial Solutions, and Life Sciences.
8. Black Hills Corporation (NYSE:BKH)
Analayt Upside Potential: 19.7%
On June 11, BofA upgraded Black Hills Corporation (NYSE:BKH) to Buy from Neutral. It also raised its price target on the stock to $78 from $76. It expects Black Hills’ pending all-stock merger with NorthWestern Energy (NWE) to be completed and believes the strategic benefits of the deal are being overlooked by the market. According to the analyst, the combination would provide greater scale, a stronger balance sheet, broader geographic diversification, and a larger pipeline of infrastructure opportunities across data centers, transmission, power generation, and natural gas.
The analyst also pointed to Wyoming as an emerging data center market that remains underappreciated. The state already has active sites, additional projects under development, and strong political and regulatory support for large-load growth. The Jade project was highlighted as the most visible opportunity, with “material expansion potential that we view as progressing vs. paused.”
BofA added that Black Hills’ ring-fenced LPCS tariff creates an opportunity for the company to earn returns on both company-owned and customer-funded infrastructure. At the same time, it helps shield existing customers from the rate impacts associated with large-load projects.
Black Hills Corporation (NYSE:BKH) is a customer-focused utility company serving about 1.35 million natural gas and electric customers across eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming.
7. Verizon Communications Inc. (NYSE:VZ)
Analayt Upside Potential: 20.22%
On June 12, Freedom Broker initiated coverage of Verizon Communications Inc. (NYSE:VZ) with a Hold rating. It also set a $53 price target on the stock.
The firm said the US telecom and cable sector entered 2026 at a more advanced stage of the convergence cycle than many investors had expected just a few quarters earlier. It views T-Mobile (TMUS) as the strongest fundamental story in the sector, citing its spectrum position, EBITDA growth rate, FCF margin, and balance-sheet flexibility.
By comparison, the firm described Verizon as “a more execution-dependent convergence story.” The analyst noted that the company’s earnings inflection is “real,” but said revenue conversion continues to be delayed by amortization mechanics and bundle-discount headwinds.
Verizon Communications Inc. (NYSE:VZ) is a holding company that, through its subsidiaries, provides communications, technology, information, and streaming products and services to consumers, businesses, and government entities.
6. A. O. Smith Corporation (NYSE:AOS)
Analayt Upside Potential: 20.8%
On June 10, Oppenheimer lowered its price recommendation on A. O. Smith Corporation (NYSE:AOS) to $75 from $80. It reiterated an Outperform rating on the stock. The firm recently hosted an investor group at A.O. Smith’s headquarters, where CFO Chuck Lauber and VP of FP&A and IR Helen Gurholt represented the company. Discussions focused on 2026 demand trends, price and cost dynamics, the regulatory environment, and management’s efforts to transform the portfolio.
Oppenheimer acknowledged that growth may remain under pressure in the near term. Even so, the firm believes A.O. Smith is well-positioned for stronger growth and profitability over time. It pointed to the company’s replacement-driven revenue base, ongoing cost initiatives, and flexibility provided by its balance sheet and portfolio. The firm also views the stock’s valuation as notably attractive.
A. O. Smith Corporation (NYSE:AOS) develops and applies technologies and solutions to products sold worldwide. The company operates through two segments: North America and the Rest of the World.
5. Becton, Dickinson and Company (NYSE:BDX)
Analayt Upside Potential: 21.24%
On June 12, BofA lowered its price recommendation on Becton, Dickinson and Company (NYSE:BDX) to $170 from $177. It reiterated a Neutral rating on the shares. The analyst noted that the firm’s services team continues to observe lower utilization across the healthcare sector. As a result, BofA is taking a more cautious approach to 2027 estimates for medtech companies, particularly since current valuations already reflect some utilization-related risks.
The analyst also expects inflation to remain a greater headwind in 2027, which could limit margin expansion across the medtech industry. Based on those assumptions, BofA reduced its 2027 estimates for several large-cap companies in its coverage universe that have exposure to both utilization trends and inflation pressures.
Becton, Dickinson and Company (NYSE:BDX) is a global medical technology company. It develops, manufactures, and sells a wide range of medical supplies, devices, laboratory equipment, and diagnostic products. Its products are used by healthcare institutions, physicians, life science researchers, clinical laboratories, and other healthcare professionals.
4. Medtronic plc (NYSE:MDT)
Analayt Upside Potential: 21.9%
On June 4, Truist reduced its price recommendation on Medtronic plc (NYSE:MDT) to $86 from $95. It reiterated a Hold rating on the shares. The firm pointed to a stronger-than-expected fourth quarter on the revenue side, with organic revenue growth coming in ahead of expectations. Margins, though, were softer than anticipated, while fiscal 2027 guidance largely matched forecasts. In its research note, Truist said it would need to see earnings per share growth move beyond the mid-single-digit to high-single-digit range before taking a more positive view on the stock.
Goldman Sachs analyst David Roman also trimmed his price target on Medtronic, lowering it to $83 from $84 while maintaining a Neutral rating. Roman said the company delivered fourth-quarter results that exceeded consensus expectations for organic revenue growth. Even with that stronger top-line performance, Goldman Sachs lowered its fiscal 2027 EPS estimate to $5.91 from $6.03. The adjustment was driven mainly by expectations for lower gross and operating margins, as well as the timing of Medtronic’s Diabetes spin-off.
Medtronic plc (NYSE:MDT) is an Ireland-based healthcare technology company that develops and provides medical technology solutions.
3. Gilead Sciences, Inc. (NASDAQ:GILD)
Analayt Upside Potential: 27.88%
On May 22, Reuters reported that Gilead Sciences, Inc. (NASDAQ:GILD) said its experimental drug for a rare and potentially fatal liver infection had received US approval. The U.S. Food and Drug Administration approved Hepcludex for the treatment of chronic hepatitis delta virus (HDV), a liver disease that affects people already infected with hepatitis B. The disease can lead to liver scarring, cancer, organ failure, and death.
According to the company, an estimated 40,000 to 80,000 people in the United States are living with HDV. Wendy Carter, acting director of the Office of Infectious Diseases in FDA’s Center for Drug Evaluation and Research, made the following statement:
“Today’s approval fills a critical gap in care for patients with chronic HDV infection, who until now have had no FDA-approved therapies available.”
Data from a late-stage clinical trial supported the approval. About 48% of patients who received Hepcludex showed a meaningful improvement after 48 weeks, compared with 2% of patients whose treatment was delayed. The trial also showed that the virus became undetectable in patients the longer they remained on Hepcludex.
Gilead Sciences, Inc. (NASDAQ:GILD) is a biopharmaceutical company focused on advancing medicines to prevent and treat life-threatening diseases.
2. Comcast Corporation (NASDAQ:CMCSA)
Analayt Upside Potential: 35.2%
On June 12, Freedom Broker initiated coverage of Comcast Corporation (NASDAQ:CMCSA) with a Hold rating. It also set a $29 price target on the shares. The analyst noted that Comcast remains the largest broadband provider in the United States. In a research note, the firm said a broadband pricing reset is likely to put pressure on the company’s near-term average revenue per user and EBITDA. At the same time, Freedom Broker believes the move could help stabilize customer churn and rebuild lifetime value over the next 12 to 18 months. The firm added that Comcast’s “strong assets are offset by limited earnings visibility.”
On June 5, Rosenblatt lowered its price recommendation on Comcast to $24 from $30. It reiterated a Neutral rating on the shares. According to the analyst, a new concern for investors is broadband subscriber competition from Starlink, particularly with a potential SpaceX initial public offering on the horizon. The firm said that while this threat “seems unlikely to be really noticeable,” it still sees limited potential for a near-term re-rating of Comcast shares in the current environment.
Comcast Corporation (NASDAQ:CMCSA) is a global media and technology company. It provides broadband, wireless, and video services through Xfinity, Comcast Business, and Sky. The company also produces, distributes, and streams entertainment, sports, and news content through several brands.
1. Oracle Corporation (NYSE:ORCL)
Analayt Upside Potential: 45.05%
On June 11, Wedbush lowered its price recommendation on Oracle Corporation (NYSE:ORCL) to $240 from $275. It reiterated an Outperform rating on the shares. The firm noted that Oracle’s fourth-quarter results exceeded expectations on both revenue and earnings. It also highlighted the company’s solid fiscal 2027 guidance and said the closely watched remaining performance obligations (RPO) figure came in well above expectations.
According to Wedbush, demand for cloud services, AI training, and AI inferencing continues to accelerate, supporting Oracle’s growth outlook. The company also announced plans to raise about $40 billion through a combination of debt and equity financing in fiscal 2027, including a $20 billion at-the-market equity offering. Oracle said it does not expect to issue additional debt in 2026, as expanding AI infrastructure quickly and at scale remains a top priority.
Wedbush believes Oracle is making the right moves to capitalize on the growing AI opportunity. The firm added that the company’s record backlog provides the revenue visibility needed to support this aggressive infrastructure expansion.
Oracle Corporation (NYSE:ORCL) provides integrated application suites and secure, autonomous infrastructure through Oracle Cloud. The company operates across three business segments: cloud and license, hardware, and services.
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