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After an unsettling start to 2026 on the geopolitical front, I wouldn’t blame investors for gravitating towards dividend stocks. Seeing a lovely lump of cash hit their accounts every so often might be enough to calm the nerves and stay the course.
Today, I’ll pick out three examples for investors to consider snapping up.
Huge dividends!
Insurance giant Aviva (LSE: AV) looks a solid pick to kick things off. Under the stewardship of CEO Amanda Blanc, the FTSE 100 member has become a far leaner entity. The market’s lapped this up: since her appointment in July 2020, the share price has more than doubled.
From an income investor’s perspective, there’s an awful lot to like too. Right now, the stock has a forecast dividend yield of 6.7% for 2026. This makes Aviva one of the biggest payers in the index. Encouragingly, the total amount returned has increased every year since the pandemic.
The firm’s close ties to the health of the UK economy means there’s still risk here. It operates in very competitive markets too.
But this is exactly why I reckon it’s important to spread money around. Theoretically, owning shares from a variety of sectors makes it less likely that an investor will see their prized income completely wiped out.
Smokin’ hot income
Tobacco firm British American Tobacco (LSE: BATS) is a great example of a very different business.
Sure, ‘sin stocks’ aren’t for everyone. But those who are comfortable buying shares that sit in this category look set to earn a 5.8% yield in the current financial year, based on analyst expectations and the current price. That’s double the 2.9% yield of the FTSE 100 as a whole.
One clear threat to be wary of here is the gradual decline of traditional cigarette sales. While there’s hope that this loss of revenue will be replaced by sales of next-generation products such as nicotine pouches, there’s no guarantee this will happen. Even if it does, this space looks set to remain an easy target for regulators.
For now however, British American Tobacco’s defensive qualities look attractive. Shares are up almost 40% in one year.
Contrarian opportunity
In sharp contrast to the other companies mentioned here, Diageo (LSE: DGE) shares have been on a downward trajectory for what feels like forever.
And no wonder. The firm’s struggled to grow sales as consumers battle to pay the bills. President Trump’s on/off approach to tariffs hasn’t helped sentiment. Nor has the advent of appetite-suppressing weight-loss drugs.
However, the best time to buy a stock is often when it’s out of favour. That may prove to be the case here.
Despite its current woes, Diageo still has a portfolio chock full of brands that people habitually consume. The shares also yield 4.4%. So those with the courage to buy now should be compensated while they await a recovery.
True, new CEO Dave Lewis has his work cut out. There’s always a chance he could decide to reduce payouts to shore up cash. Diageo does already have quite a hefty amount of debt on its books.
But his no-nonsense approach worked wonders at Tesco a few years ago. I think history could repeat itself.
