Three High-Income Stocks to Buy Now: Dividend Growth Opportunities in 2026

In today’s market environment, dividend-paying stocks continue to offer investors a powerful dual opportunity: steady income streams and the potential for meaningful price appreciation. What distinguishes exceptional dividend stocks to buy from ordinary ones? The answer lies in identifying companies with unwavering commitment to shareholder payouts, coupled with business models resilient enough to weather economic challenges while continuing to grow those payments. The three stocks profiled below represent compelling opportunities for income-focused investors seeking both current yield and future growth.

Finding Dividend Stocks Worth Buying: What Separates Winners from Losers

When evaluating dividend stocks to buy, savvy investors look beyond yield alone. They examine whether a company maintains the financial strength to increase payouts annually, whether management teams are actively working to improve business fundamentals, and whether the stock’s valuation creates a margin of safety. The most attractive candidates often face temporary headwinds that have depressed their share prices—creating exactly the type of opportunity where high yields and low valuations converge.

Consider the market backdrop: as interest rates have begun declining from their recent highs, capital-intensive businesses and income-focused investments are regaining investor attention. Moreover, companies that have already endured scrutiny and weathered storms often emerge stronger, with management teams motivated to prove doubters wrong. This dynamic creates a fertile hunting ground for those seeking dividend stocks to buy at compelling valuations.

Realty Income (O): A Monthly Payout Machine Built for Growth

Realty Income operates in a uniquely stable corner of the real estate market—single-tenant commercial properties where tenants assume the burden of taxes, insurance, and maintenance costs. This arrangement shifts operational risk away from the company while ensuring predictable cash flows.

The company’s portfolio spans over 15,500 properties, and its client roster reads like a who’s-who of retail resilience: Home Depot, Dollar General, and Wynn Resorts represent the caliber of tenants backing these holdings. With occupancy rates hovering near 99%, the company continues to selectively acquire and develop additional properties—a sign of management confidence in the asset class.

What truly distinguishes Realty Income is its dividend track record. Earning its “monthly dividend” moniker through lived experience, the company has distributed dividends every single month since 1994 and has raised that payment at least once annually since then. The current annual payout of $3.24 per share translates to a 5.3% dividend yield—a striking premium to the S&P 500’s meager 1.1% average.

The combination of elevated yields and a depressed stock price reflects recent interest rate pressures. However, with the Federal Reserve pivoting toward rate reductions, the investment calculus is shifting. Lower rates should enhance the attractiveness of new property acquisitions and refinancing opportunities, potentially boosting Realty Income’s earnings trajectory and share price. Add to this the fact that the stock trades at just 15 times FFO (funds from operations, a REIT-specific profitability measure), and the valuation picture becomes even more compelling for income-seeking investors.

Target (TGT): Dividend Growth Potential Under New Leadership

Target commands a massive footprint across America: nearly 2,000 locations in all 50 states mean that over three-quarters of Americans live within a 10-mile radius of a store. This distribution strength remains a fundamental asset.

The company has faced legitimate headwinds recently. Its upscale discount positioning appears to resonate less powerfully in an economically uncertain environment. Bloated inventory levels have dragged on financial performance, and missteps in political engagement have managed to alienate customers across the ideological spectrum. The result: a sharp decline in stock price that has compressed valuation metrics substantially below retail peers like Walmart and Costco.

Here’s where opportunity emerges: Target qualifies as a Dividend King, having increased its payout for 54 consecutive years—a distinction that carries weight. The current annual dividend of $4.56 per share yields 4.3%, and given that eliminating or freezing dividend growth would likely catalyze further stock weakness, management has little choice but to continue annual increases.

More importantly, the company recently elevated COO Michael Fiddelke to the CEO position, signaling operational change. Fiddelke’s agenda includes a $5 billion capital allocation plan earmarked for store renovations, technology upgrades, and infrastructure improvements. These investments target the core issue: making Target stores more appealing and efficient. Coupled with a P/E ratio far below sector comparables and an attractive dividend yield, Target presents a potential turnaround narrative worth monitoring closely.

Clorox (CLX): Turnaround Story with Stable Dividend Backing

Clorox is recognized primarily for its flagship cleaning products, yet its portfolio encompasses dozens of brands across multiple categories—Kingsford charcoal, Hidden Valley Ranch dressings, and Burt’s Bees personal care products represent just a sampling of its diversified holdings.

The company suffered from multiple, overlapping challenges. As pandemic-driven cleaning obsessions faded, investor enthusiasm cooled. Inflationary pressures, a 2023 cyberattack, and a complex enterprise resource planning system implementation have all contributed to operational disruption and shareholder anxiety. The cumulative impact: a meaningful decline in share price that reduced the P/E ratio to 18—near multiyear lows—while simultaneously boosting the dividend yield on its $4.96 annual payout to 4.4%.

What grounds investor confidence is Clorox’s multi-decade streak of annual dividend increases. This history suggests management’s commitment to returning cash to shareholders even amid challenges. Looking ahead, conditions appear poised to improve. The disruptive ERP implementation that temporarily curtailed sales should unlock operational efficiencies that flow directly to profitability. If the experience of fellow consumer staples giants like Procter & Gamble is instructive, brand loyalty can prove remarkably durable even when inflation pressures mount. For investors seeking a dividend stock with compelling upside as operational storms pass, Clorox merits serious consideration.

The Bottom Line: Why These Dividend Stocks Deserve Your Portfolio Space

The three stocks outlined above share common characteristics that make them attractive dividend stocks to buy at current levels: each offers yields substantially above historical averages, each sports valuations depressed by temporary challenges rather than fundamental deterioration, and each possesses management teams and business models capable of sustaining and growing payouts through market cycles.

For income-focused investors, the convergence of elevated yields, reasonable valuations, and credible turnaround narratives rarely aligns perfectly. When it does—as it appears to now with these three dividend growth prospects—it’s worth paying attention. These stocks to buy represent opportunities to lock in meaningful current income while positioning for appreciation as business conditions improve and investor sentiment normalizes.