But let’s take a step back and ask why this is important.

After spending years building up your nest egg, you want to step into the retirement you deserve — whether that means relocating to a dream destination, traveling more, spending more time with family, or simply enjoying the comfort of your finances.

What you don’t want is constant stress about market swings, inflation quietly eroding your purchasing power, or the fear of outliving your savings.  You also don’t want to live on the scant 0.6% from your average savings account.

Collect 3.38% Every Quarter

One way to do that is by investing in a safe, high-yielding exchange traded fund (ETF), like the Schwab U.S. Dividend Equity ETF (NYSEARCA: SCHD). With an ultra-low expense ratio of 0.06%, the SCHD ETF tracks the total return of the Dow Jones U.S. Dividend 100 Index. The fund currently holds 101 dividend-paying stocks, including blue-chip names such as Bristol Myers Squibb (NYSE: BMY), Merck & Co. (NYSE: MRK), ConocoPhillips (NYSE: COP), Lockheed Martin Corp. (NYSE: LMT), Chevron (NYSE: CVX), Verizon Communications Inc. (NYSE: VZ), and Cisco Systems (NASDAQ: CSCO).

SCHD pays a quarterly dividend, making it a reliable source of regular income. It last paid out just over 27 cents per share on December 15. Before that, it distributed just over 26 cents per share on September 29 and just over 26 cents per share again on June 30. That kind of consistency is exactly what retirees need when planning monthly expenses.

The ETF is also up about 15% since the start of the year after a lackluster 2025. This is a reminder that dividend-paying ETFs can offer growth potential alongside income.

High Standards, Built-In Stability

What really sets SCHD apart from other dividend-paying ETFs is its strict eligibility criteria. To even be considered for inclusion, a company must have at least 10 consecutive years of dividend payouts, a market cap of no less than $500 million, and an average three-month daily trading volume of at least $2 million. In short, the ETF doesn’t accept any slouches. SCHD also favors companies carrying little to no debt, adding an extra layer of stability that matters when volatility picks up.

This disciplined, rules-based approach is one reason SCHD has earned a strong reputation among investors who prioritize quality over yield-chasing. Many dividend-paying ETFs simply sweep up the highest yields available without regard for financial health — SCHD takes the opposite approach, screening for durability first.

The SCHD ETF Will Rebalance in March

In just weeks, the SCHD ETF will also undergo its annual rebalancing. This time around, it’s again expected to rotate out of stocks with compressed yields and into stocks with higher yields, which should include stocks in the financial and healthcare sectors.

For investors keeping an eye on dividend-paying ETFs heading into the spring, this rebalancing could create a timely entry point. It offers a strong alternative. Owning a high-quality dividend ETF like SCHD can be a powerful step toward turning your hard-earned nest egg into lasting financial security.

A Smarter Alternative to Your Savings Account

The SCHD ETF has proven to be a reliable choice for those seeking income, stability, and long-term growth. And it provides all of that in a single, low-cost fund. For investors who want to replace the unreliable interest of a savings account with a consistent quarterly paycheck, without taking on excessive risk, SCHD offers a compelling alternative.

Owning a high-quality dividend-paying ETF like SCHD can be a powerful step toward turning your hard-earned nest egg into lasting financial security — and the kind of retirement you’ve actually been working toward.

For the fourth quarter — with results scheduled for release on Thursday before the opening bell — Wall Street is anticipating earnings per share of $1.23 on revenue of $12.27 billion. In the year-ago quarter, the pharmaceutical giant posted EPS of $1.67 on revenue of $12.34 billion. These figures beat the consensus target of $1.47 and $11.56 billion, respectively.

Since February 2024, Bristol-Myers has delivered top-and-bottom-line beats consecutively. During this period, BMY stock has gained nearly 15%, which isn’t the most awe-inspiring performance. For context, the benchmark S&P 500 moved up about 40% during the same period.

Nevertheless, with so many popular enterprises suffering volatility amid a rotation away from growth-oriented names, Bristol-Myers looks intriguing. Fundamentally, healthcare represents one of the core necessities, making it a durable sector amid challenging economic circumstances. Even better, the smart money has positioned itself for upside convexity.

Volatility Skew Reveals a Clear Bias for BMY Stock

Before exploring complex analyses, it’s important to exhaust the important first-order frameworks. One of the most insightful is volatility skew, which identifies implied volatility or a stock’s potential kinetic output across the strike price spectrum of a given options chain. For various expiration dates, the smart money appears to be leaning bullishly.

For example, the Feb. 6 weekly chain — which is the expiration date after Bristol-Myers’ Q4 earnings — reveals heightened IV pricing for calls, especially at strike prices below the spot price. This indicates that the priority among sophisticated market participants is upside optionality. Further, many of these calls appear to be deep in-the-money (ITM) calls, which suggests that traders are willing to pay a premium for potential upside convexity.

Just as significantly, the premium for downside insurance is limited relative to demand for calls. That’s not to say that the smart money doesn’t fear volatility because downside is treated as a non-trivial risk. However, the bias clearly leans to the bullish side of the spectrum.

It’s also worth pointing out that call IV to the right (or above) of the spot price is gradual. Effectively, the market is pricing continuation risk, not breakout certainty. So, while we’re probably not talking about a moonshot, the general sentiment is that BMY stock is not expected to collapse.

Looking a little bit further ahead for the March 20 expiration date, we see a similar dynamic. Deep ITM calls have seen higher IV pricing, reflecting a bullish lean. On the upper boundaries, both put and call IV are modestly elevated, with puts carrying a slight edge. As such, there appears to be some hedging involved, though the general setup is again to position for upside convexity.

Defining the Search Parameters

While we may have a basic understanding of the bias of the smart money, we’re still at a loss as to how this may translate into actual outcomes. To find out, we can turn to the Black-Scholes-derived expected move calculator. For the March 20 expiration date, the model anticipates that BMY stock will land between $52.54 and $59.60. This range represents a 6.3% high-low spread relative to the current spot price.

Where did this dispersion come from? Black-Scholes assumes a world where stock market returns are lognormally distributed. Under this framework, the above range represents where BMY stock would fall symmetrically one standard deviation away from spot (while accounting for volatility and days to expiration).

If you look at the math, the model basically states that in 68% of cases, BMY should land between roughly $53 and $60 when March 20 rolls around. And while this lays out the parameters of the battlefield, it’s not the most instructive piece of data for debit-side options traders.

Let’s imagine that you are a member of a search-and-rescue team and you need to look for shipwrecked survivors. Black-Scholes is important because it declares that the stricken ship went down somewhere in the Pacific Ocean (as opposed to, say, the Atlantic).

However, the model makes its calculations independent of market structure. Stated differently, it’s probably accurate in setting the search parameters, but it doesn’t offer a probabilistic view because it doesn’t incorporate contextual factors that could influence forward probabilities.

Well, that’s a major problem. It’s akin to assuming that the Pacific has no current and that environmental factors are negligible. The model is also assuming that the survivors are simply floating and not swimming or behaving in ways that could compound the distance from where they made their distress call.

As an officer charged with search efforts, what would you do? Frankly, you know that not every incident merits a full-scale search. In other words, you can’t just buy a long iron condor and play both the bullish and bearish sides.

At some point, you have to use probabilistic math to improve the odds of finding the survivors — and that’s where the Markov property comes into view.

Markov to the Rescue

Under Markov, the future state of a system depends solely on the current state. That’s a fancy way of saying that forward probabilities should not be independently calculated but rather assessed under an ecosystem context. To use a simple football analogy, a 20-yard field goal is an easy chip shot. Add snow, wind and playoff pressure, and these odds may change dramatically.

When it comes to our search-and-rescue analogy, Markov isn’t just useful — it’s necessary. For example, let’s consider the current context of BMY stock. In the last 10 weeks, it printed eight up weeks, leading to an overall upward slope. This 8-2-U sequence represents a specific type of ocean current. Put another way, survivors caught in these waters will likely drift in a certain way compared to if a different type of current were involved.

Subsequently, we can use enumerative induction to see how the market typically responds under 8-2-U conditions, as well as incorporate a Bayesian-lite inference to reach an estimated range. Over the next 10 weeks, we would expect BMY stock to land between $55 and $62, with probability density peaking between $58.50 and $60.

Does that mean BMY is guaranteed to coalesce at this peak range? No. The market is a dynamic and cruel place, much like the Pacific Ocean. If you get lost at sea, you can bet that the U.S. Coast Guard will use Markovian models to pinpoint where you might be. But you can also be eaten by a shark — and there’s no way to predict that.

Still, the theory is that over time, market behaviors statistically conditioned on specific quantitative structures should yield similar results. That’s where inductive Bayesian inference comes into the frame. In a world of uncertainties, this is probably the best approach available to retail traders.

Let’s move away from theory and go into practical applications. Given the above market intel, I like the 57.50/60.00 bull call spread expiring March 20. If BMY stock rises through the $60 strike at expiration, the spread will trigger the maximum payout, which stands at 150%. Breakeven lands at $58.50, bolstering the trade’s probabilistic credibility.

But what should you look for? Let’s take as a given that investors should look for stocks with a dividend yield of around 3%. The most recent, if not necessarily reliable, inflation data we have puts inflation around 2.7%. It’s too early to tell if inflation will increase as monetary power loosens and stimulus is added to the economy. Nevertheless, a dividend of at least 3% will be needed to keep your investments ahead of inflation. 

These stocks provide investors with the benefit of reliable quarterly distributions that you can accept as cash in your bank account or that you can reinvest to increase your position in the stock.  

However, you should expect more from dividend stocks than reliable income. The stocks on this list also have a history of delivering a solid total return, which includes stock price appreciation to go along with a growing dividend. That’s how you maximize the benefits of compounding.  

Dividend Stocks to Buy: AbbVie

AbbVie Inc. (NYSE: ABBV) is hardly considered a comeback story. ABBV stock is up nearly 30% in 2025, and analysts are raising their price targets for the next 12 months. Outside of a company like Eli Lilly & Co. (NYSE: LLY), which is in a dominant position in the GLP-1 market, it’s been a rough year for pharmaceutical stocks. 

The key for AbbVie is that the company has successfully replaced the revenue it’s losing as its blockbuster Humira drug reached the patent cliff. But AbbVie’s patent-protected Skyrizi and Rinvoq are picking up the slack, and the company has a deep pipeline and a robust balance sheet that gives the company the firepower to get them across the finish line. 

AbbVie is also a dividend king, meaning it’s increased its dividend for at least 50 consecutive years. The yield as of this writing is 2.84% and is well covered by the company’s cash flow.  

Dividend Stocks to Buy: Bristol-Myers Squibb 

Bristol-Myers Squibb Co. (NYSE: BMY) has had a challenging few years as investors have cooled on large pharmaceutical names facing patent expirations. But value-minded dividend investors may find an opportunity as the stock appears deeply discounted relative to its historical valuation. The company trades at a forward P/E under 10 and offers a dividend yield in the 4.9% range—well above the market average. 

The fundamentals remain solid. Bristol-Myers is focusing on expanding newer drugs like Eliquis, Opdivo, and Reblozyl while investing in its pipeline of oncology and immunology therapies. Near-term results may stay lumpy, but with a steady cash flow profile and consistent earnings support, the dividend looks safe.

For contrarian investors, BMY provides a classic example of a high-yield stock with stabilization and upside potential if sentiment improves in 2026. 

Dividend Stocks to Buy: Pepsi 

PepsiCo Inc. (NASDAQ: PEP) offers a blend of income reliability and defensive growth that fits well in a 2026 portfolio rotation. While consumer staples stocks have lagged during the speculative surge into AI and tech, that underperformance has set the stage for better entry points. PepsiCo’s diversified product portfolio, from beverages to snacks, gives it pricing power and resilience even in a slower economy. 

The company has increased its dividend for more than 50 years, placing it among the Dividend Kings. Its yield of roughly 3% is comfortably above inflation, and its payout ratio of around 70% indicates room for further growth. As input cost pressures ease and global demand normalizes, PepsiCo looks positioned for mid-single-digit earnings growth alongside continued capital returns. 

Dividend Stocks to Buy: Enbridge 

Next on my list is Enbridge Inc. (NYSE: ENB), which is an energy infrastructure company. For starters, Enbridge has a high-yield dividend of 5.66% as of December 26. An above average yield can be a value trap, but that doesn’t appear to be the case with Enbridge.  

The catalyst is likely to be the company’s positioning with heavy crude oil. This is the type of crude oil needed for applications like diesel fuel. Unlike light crude oil, heavy crude inventories are low. That means countries with heavy oil resources, such as Canada, will benefit.  

Enbridge is the largest transporter of Western Canadian select. And the company has long-term contracts, a stable tolling model, and expansion opportunities that give investors exposure without the upstream risk.  

Dividend Stocks to Buy: Texas Instruments 

Texas Instruments Inc. (NASDAQ: TXN) stands out in the semiconductor space as one of the most dependable dividend payers. While many chipmakers lean heavily on cyclical end markets, TI’s strategy focuses on analog and embedded chips used in long-duration industrial and automotive applications—segments that provide stable, recurring demand. 

The company has raised its dividend for 20 consecutive years, and at a current yield near 3.3%, TXN offers an appealing blend of income and long-term growth. With its disciplined capital allocation, massive free cash flow generation, and conservative balance sheet, Texas Instruments embodies the kind of steady compounder that dividend investors can hold through multiple market cycles. 

The Bottom Line on High-Powered Dividend Stocks for 2026 

As the market transitions from speculative tech toward more income-focused investing, dividend stocks are regaining their appeal. The five companies highlighted here: AbbVie, Bristol-Myers Squibb, PepsiCo, Enbridge, and Texas Instruments, combine reliable dividend growth with the potential for solid total returns. 

They operate in diverse sectors, ranging from healthcare and consumer staples to energy and semiconductors, providing investors with balance and resilience across different market conditions. In 2026, when interest rates may finally stabilize and inflation holds near current levels, long-term dividend payers like these could quietly outperform, rewarding patient investors with steady income and compounding gains over time.