Investment experts are highlighting a selection of low-cost stocks from around the world that they believe are poised for significant growth in 2026. Many of these stocks also offer attractive dividend payouts, making them appealing to income-focused investors.
Diversifying investments is essential for long-term success. This principle applies not only to asset classes like equities and bonds but also to sources of income, emphasizing the importance of spreading investments across various stock markets and companies. The UK equity market, for instance, is currently experiencing new highs and remains a strong source for dividends. Analysts predict that dividends from the largest 100 listed companies in the UK will total £86 billion in 2026, representing a 6.5 percent increase from the previous year. Forecasts suggest that these payouts could rise to £92.6 billion in 2027.
As inflation eases to 3.2 percent and interest rates decline to 3.75 percent, opportunities for growing dividend income in the UK market remain attractive. Although UK stocks should form the backbone of any long-term investment portfolio, it is crucial to consider diversification into global markets.
According to research from Capital Group, global dividends are increasing at a rate exceeding 6 percent annually, with the United States, Asia, and Europe leading this growth. David Coombs, head of multi-asset investments at Rathbones Asset Management, particularly favors companies like Coca-Cola, which boasts a 3 percent dividend yield and is nearing its 64th consecutive year of dividend increases.
Accessing Global Dividend Income
For investors seeking exposure to international income, investment funds and trusts offer a practical route. Numerous funds are dedicated to sourcing dividends globally, with options focused on regions such as the US, Europe, and Asia. Recently, a list of ten income-seeking investment trusts was highlighted, many of which derive substantial income from overseas markets. Notable names include Aberdeen Asian Income, Brunner, Fidelity China Special Situations, and Scottish Mortgage.
The Association of Investment Companies also publishes a list of ‘dividend heroes,’ highlighting funds that have consistently increased their annual income for over a decade. Platforms like AJ Bell, Hargreaves Lansdown, and Interactive Investor feature top fund lists that include equity income options.
For those willing to take a more direct approach, purchasing shares in overseas companies focused on dividend payouts is another option. Platforms now enable investors to buy international shares and hold them in self-invested personal pensions (SIPPs) or investment accounts. For instance, AJ Bell provides access to 23 international stock markets, including the US and Germany, while Interactive Investor offers access to over 6,000 overseas shares.
Top Dividend Stocks to Consider
A recent panel of financial experts identified a range of overseas shares that could appeal to income-seeking investors. Their recommendations span three major regions: the US, Europe, and Asia. In the US, companies like Pfizer and Verizon stand out, with dividend yields of 6.8 percent each, while Kimberly-Clark offers a yield of 5.2 percent. Despite some concerns regarding Pfizer’s market performance, analysts remain optimistic about its future product pipeline, particularly in oncology.
In the European market, Deutsche Telekom emerges as a favorite among analysts, boasting a current yield of 3.3 percent. The company is expected to announce a dividend of €1 per share in March, and its strong cash generation suggests that the dividend is secure and likely to grow. Additionally, Pernod Ricard, known for brands like Absolut and Jameson, has a dividend yield of 6.5 percent.
In Asia, Toyota Motors is gaining attention for its dividend yield of 2.9 percent. Analysts highlight the company’s hybrid strategy as a strong cash flow generator, supporting its attractive dividend amid a cautious transition to electric vehicles.
Finally, as the investment landscape evolves, the centenary of the Finsbury Growth & Income Trust is a reminder of the importance of long-term investment strategies. Founded in 1926, this trust has seen significant market fluctuations but remains a notable player in UK equity income.
Investors are urged to consider these insights carefully as they navigate the global investment landscape in search of growth and reliable income.
