3 Dividend Stocks for January 2026

David Harrell: Hi, I’m David Harrell, editor of the Morningstar DividendInvestor newsletter. In this monthly series, we take a look at the dividend prospects of three stocks that are popular with income investors.

3 Dividend Stocks for January 2026

1. Comcast CMCSA
2. Campbell’s CPB
3. United Parcel Service UPS

Comcast, the telecommunications and entertainment conglomerate, raised its dividend by 6.5% for its second payout of 2025. Yet, the stock’s yield has increased by 40% to 4.7 from 3.3 over the past year, mostly because of the drop in the share price in 2025. During the company’s Oct. 30 earnings call, the CFO noted that Comcast’s current yield is a multiple of the broader market’s yield. Such statements generally don’t bode well for large near-term dividend increases. Also, while Comcast has said that its recent spinoff of several cable channels under the Versant banner won’t affect the dividend, there’s a chance it could result in a pause and future dividend growth.

However, the current dividend is well-covered by free cash flow. In assessing Comcast’s financial strength, Morningstar analysts noted that rising cash taxes and increased capital spending to support network upgrades and theme park expansion have constrained free cash flow growth. But they also noted that dividends consumed less than 40% of free cash flow in recent years, providing ample strategic flexibility. Comcast shares currently trade at more than a 30% discount to the $42 fair value estimate, resulting in a 5-star rating.

In recent years, the dividend growth of packaged food manufacturer Campbell’s has been modest, at 1.9% annualized for the past five years. The company has also kept the dividend rate flat for several years between increases, the most recent one, a 5.4% raise declared in December of 2024. However, the stock currently yields close to 6.0%, well above its five-year average of 3.3%, due to a more than 40.0% decline in its share price over the past five years. Morningstar analysts forecast better dividend growth over the next decade, anticipating that Campbell’s will increase its dividend at a high single-digit rate annually through fiscal 2035, maintaining a payout ratio of around 60%. Campbell’s is also trading in the 5-star territory, with shares priced at less than half of Morningstar’s $60 fair value estimate.

Package delivery giant UPS currently yields 6.2%, with 11.2% annualized dividend growth over the past five years, though that mostly comes from a 49% increase in 2022. Recent raises have been much smaller. The current annual dividend rate of $6.56 represents a payout ratio of more than 100% and also exceeds the company’s free cash flow over the past 12 months. But when asked about it during the company’s Oct. 28 earnings call, the CFO said he expected cash flow to exceed the annual dividend amount in the near future.

Morningstar analysts consider the 2022 dividend increase as somewhat ambitious, and while they’re not explicitly modeling a dividend cut, they do believe it is a growing risk. They noted that while the balance sheet is healthy and UPS could probably make the current dividend work, they wouldn’t be surprised if the board eventually cuts the dividend to be more in line with UPS’ targeted 50% payout ratio. All else being equal, a dividend cut probably wouldn’t affect their $113 fair value estimate. But it could create short-term share price volatility. UPS now trades at a modest discount to that estimate, placing it in the 3-star territory.

I’m David Harrell from Morningstar DividendInvestor. Thanks for watching. We’ll see you next month.

Watch 3 Dividend Stocks for December 2025 for more from David Harrell.