Investment experts are highlighting a selection of undervalued stocks expected to experience significant growth in 2026, many of which also offer generous dividends. This strategy emphasizes the importance of diversification, suggesting that investors should not rely solely on one asset class or market but instead spread their investments across various sectors and regions.
The UK equity market is currently thriving, with analysts predicting that dividends from the top 100 listed companies will reach £86 billion in 2026, marking a 6.5 percent increase from the previous year. Looking ahead, the forecast for total payouts is set to rise further to £92.6 billion. With inflation at a manageable rate of 3.2 percent and interest rates declining to 3.75 percent, the case for investing in UK stocks remains quite strong.
Global Dividend Opportunities
While UK equities should form the cornerstone of a long-term investment portfolio, experts also encourage looking beyond domestic markets. According to data from Capital Group, global dividend growth is currently exceeding 6 percent per year, with the United States, Asia, and Europe leading this trend.
David Coombs, head of multi-asset investments at Rathbones Asset Management, points to companies like Coca-Cola, which boasts a 3 percent dividend yield and is nearing its 64th consecutive year of increasing dividends. Such companies exemplify the potential of global investments that provide consistent income streams.
For investors interested in accessing international returns, investment funds and trusts are recommended as efficient vehicles. Numerous funds focus on dividend-paying stocks, whether they are globally diversified or region-specific. For instance, trusts like Aberdeen Asian Income and Fidelity China Special Situations focus on international investments and have shown promising returns.
Investing platforms such as Hargreaves Lansdown, AJ Bell, and Interactive Investor provide tools and lists of top-performing equity income funds. These platforms also facilitate direct investment in international stocks, allowing investors to build a diversified portfolio.
Insights from Financial Experts
On Friday, a panel of financial experts identified several international stocks that may appeal to income-seeking investors. Among the recommendations are major U.S. companies such as Pfizer and Verizon, both offering yields of 6.8 percent, as well as Kimberly-Clark at 5.2 percent.
Experts note that while Pfizer’s market sentiment has cooled due to declining sales from its COVID-19 products, it remains a strong candidate due to its robust pipeline in oncology. Verizon, described as undervalued, is undergoing a transformation focusing on growth areas like 5G.
In Europe, Deutsche Telekom is favored for its 3.3 percent yield, with analysts predicting a safe and growing dividend supported by solid cash flows. Pernod Ricard, the French drinks giant, is highlighted for its attractive dividend yield of 6.5 percent, despite recent challenges accessing the Chinese market.
Japanese automaker Toyota Motors is also gaining attention, offering a 2.9 percent dividend yield. Analysts suggest that despite investor caution regarding its transition to electric vehicles, Toyota’s hybrid strategy continues to yield strong cash flows.
In addition to these international stocks, the centenary of Finsbury Growth & Income investment trust on March 11, 2026, will be marked by a celebration at the London Stock Exchange. This £974 million fund has a long history of providing solid returns under the management of Nick Train. Despite recent underperformance, Train remains optimistic about the fund’s potential, citing strong fundamentals among its holdings.
In summary, while UK equities remain a solid foundation for dividend income, diversifying into global markets can enhance returns. Investors are encouraged to consider both established income-generating stocks and emerging opportunities in international markets.
