3 Top Non-AI Dividend Stocks For 2026

Visitor Publish by Tom Hutchinson, Chief Analyst, Cabot Dividend Investor

The S&P is up a staggering 95% since this bull market started in October of 2022. It’s up 128% this decade, for a median annual return of about 15%, which is 50% larger than the historic common.

The excessive returns are notably spectacular contemplating this decade has included a worldwide pandemic, the best inflation in 40 years, and the best rates of interest in 20 years.

If prognosticators noticed these issues coming of their crystal balls, they doubtless would have predicted a awful market. However returns have been stellar for one dominant purpose – know-how.

The bogus intelligence catalyst is driving earnings development via the roof out there’s largest sector. The know-how is actual, and it gives a once-in-a-generation catalyst. With out know-how, market returns for the previous few years could be moderately uninspired.

With that in thoughts, Certain Dividend has compiled a listing of 130+ know-how shares full with necessary investing metrics, which you’ll entry beneath:

However the market has gotten dear. In line with The Wall Avenue Journal, the present S&P 500 value/earnings ratio is 25.63. That’s properly above historic averages, and such lofty valuations have hardly ever been sustained prior to now.

In fact, know-how has by no means been such an enormous a part of the index. The “Magnificent 7” shares plus Broadcom (AVGO) account for roughly 40% of the index. These shares at the moment commerce at a median P/E ratio of 31 occasions. Nvidia (NVDA) accounts for about 8% of the index all by itself. For perspective, the whole vitality sector accounts for lower than 3% of the index.

In the event you take out the over-representation of know-how, valuations aren’t that top. An equal-weight S&P 500 has a present P/E ratio of simply 17 occasions. The massive know-how weighting is what makes present valuations excessive by historic requirements, and people excessive know-how valuations are justified by larger earnings development.

Will the AI growth proceed in 2026? There’s rising investor angst relating to the sustainability of know-how valuations and whether or not all this huge AI funding will ship tangible payoffs. Know-how inventory costs may proceed to fall and drag the indexes decrease. I imagine the AI catalyst is actual and nonetheless within the early phases. However know-how may nonetheless have a harder 12 months in 2026.

Fortuitously, there are numerous shares that aren’t know-how. The remainder of the market cares extra about rates of interest and the financial system, and people issues are shaping up properly. The Fed is in a rate-cutting cycle, inflation is subdued, oil is reasonable, and a better stage of financial development is predicted in 2026.

The rally is broadening, and 2026 could also be a 12 months for non-technology shares to shine. General earnings are anticipated to develop 14% this 12 months, with a lot of the expansion over final 12 months coming from different sectors. Many shares in different industries promote at cheaper valuations than the market, and efficiency is bettering as buyers search to diversify past know-how.

Even when know-how and the general market flounder in 2026, a number of sectors may have an important 12 months, possibly one of the best 12 months of this decade to date. Notable sectors which can be properly positioned forward of the brand new 12 months embody well being care, financials, and utilities.

After a tough patch for many of 2025, well being care is again and on a tear. Returns have blown away all different sectors over the previous three months, and the momentum may proceed. Earnings estimates have been rising in financials and utilities. Monetary shares profit from a stronger financial system and decrease, or no less than secure, rates of interest. Utilities profit from AI as electrical energy demand continues to soar.

The bull market has been lopsided towards know-how to date. However 2026 is shaping as much as be a 12 months for different shares to catch up. Listed here are some good ones to think about.

AbbVie Inc. (ABBV)

AbbVie is a U.S.-based biopharmaceutical firm fashioned in 2013 as a derivative from Abbott Laboratories (ABT). AbbVie is a research-based pharmaceutical firm that focuses on small-molecule medication. It’s a cutting-edge firm with sturdy publicity to high-demand wants in immunology and oncology, and it has a terrific pipeline.

The corporate turned that nook from the patent expiration of its bestselling drug Humira. AbbVie has lengthy deliberate for this eventuality and has executed a stellar job launching new medication able to changing the diminishing Humira income.

Humira accounted for 75% of income a couple of years in the past. However new immunology medication, Skyrizi and Rinvoq, collectively now have gross sales that already exchange peak Humira revenues. In the latest quarter, the 2 medication had mixed income of $6.9 billion, on tempo to considerably outsell one of the best Humira 12 months. AbbVie has additionally guided for the 2 medication to usher in $40 billion by 2029.

Whereas these medication are killing it, AbbVie additionally has a sturdy pipeline of latest medication within the hopper, together with necessary cutting-edge indications within the areas of blood most cancers and Parkinson’s. In truth, there are at the moment 20 medication in section III, the ultimate section earlier than approval. AbbVie additionally at the moment has over 50 medication in earlier phases.

The corporate is formally transferring previous the Humira patent expiration that has held the inventory again for years, regardless of a 169% return over the past 5 years. Think about how ABBV may carry out with out a patent cliff and with rising gross sales.

Ally Monetary Inc. (ALLY)

Ally Monetary is the main all-digital banking firm within the U.S. with 3.3 million prospects and over $100 billion in loans. The first income supply is automotive loans (over 70%), however they’re additionally diversified in auto insurance coverage, industrial lending, mortgage financing, and bank cards.

The corporate was the monetary section of Basic Motors (GM), the place it developed right into a 100-year-old, totally developed auto mortgage enterprise. It was spun off in 2009 in the course of the monetary disaster as a part of GM’s chapter reorganization. The corporate has since targeted on the net enterprise.

The corporate is turning into very properly established within the high-growth, on-line banking a part of the business. It focuses on this space greater than established banks and should develop right into a a lot greater participant within the years forward.

ALLY has returned a strong 28% within the final 12 months however continues to be properly beneath the all-time excessive. It has momentum and is properly positioned forward of a 12 months with doubtless bettering macro fundamentals.

NextEra Vitality, Inc. (NEE)

AI is remodeling the utility sector as demand for electrical energy skyrockets to accommodate the large wants of AI information facilities. Rising demand is making electrical utilities development companies as properly.

The altering surroundings is including one other massively optimistic dimension to those underrated shares.

NextEra Vitality (NEE) is the nation’s largest producer of renewable vitality and the most important utility within the nation. It must be in a perfect place to profit going ahead.

NEE has traditionally been a celebrity performer for a utility. But it surely has stumbled lately as inflation and rising rates of interest made utilities an out-of-favor sector. However issues are altering. NEE has been trending larger since April.

NEE isn’t just a few boring, stodgy utility inventory with the potential profit of fine timing. It has a protracted observe document of not solely vastly outperforming the utility sector however the general market as properly. Previous to 2023, NEE’s complete returns greater than doubled these of the S&P 500 within the prior five- and 10-year intervals.

NEE is 2 corporations in a single. It owns Florida Energy and Gentle Firm, which is among the perfect regulated utilities within the nation, accounting for about 55% of revenues. It additionally owns NextEra Vitality Assets, the world’s largest generator of renewable vitality from wind and photo voltaic. It accounts for about 45% of earnings and gives a better stage of development.

NextEra is one of the best of each worlds: protection and development. There’s additionally an enormous runway for development tasks. NextEra has deployed over $50 billion in the previous couple of years for development expansions and acquisitions. It additionally has a big undertaking backlog.

Because the nation’s largest producer of unpolluted vitality, NextEra has an enormous benefit going ahead. The skyrocketing development in electrical energy demand is primarily pushed by information facilities and AI. Know-how corporations are extremely carbon-conscious and can go for clear vitality alternate options at any time when potential to cut back their carbon footprint.

Further Assets

The next articles include shares with very lengthy dividend or company histories, ripe for choice for dividend development buyers:

• The Dividend Aristocrats: S&P 500 shares with 25+ years of consecutive dividend will increase.
• The Dividend Kings Record is much more unique than the Dividend Aristocrats. It’s comprised of 56 shares with 50+ years of consecutive dividend will increase.
• The Excessive Dividend Shares Record: shares that enchantment to buyers within the highest yields of 5% or extra.
• The Month-to-month Dividend Shares Record: shares that pay dividends each month, for 12 dividend funds per 12 months.