10 Best Dividend Growth Stocks for February 2026
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Market Overview & Selection Criteria
In the current market environment, technology giants continue to dominate with strong revenue growth and high ROIC, while consumer staples and energy sectors offer stability amid volatility. ValueSense selected these 10 best stock picks based on intrinsic value assessments, quality ratings above 5.0, robust free cash flow generation, and attractive margins relative to market caps. Methodology emphasizes undervalued opportunities where intrinsic value significantly differs from perceived pricing, high revenue growth, superior gross margins, and low debt burdens. Stocks span semiconductors, software, payments, retail, and energy for diversified stock watchlist exposure. This educational analysis highlights top stocks to buy now for value-oriented portfolios.
Featured Stock Analysis
Stock #1: NVIDIA Corporation (NVDA)
| Metric | Value |
|---|---|
| Market Cap | $4,676.7B |
| Quality Rating | 8.2 |
| Intrinsic Value | $85.9 |
| 1Y Return | 53.3% |
| Revenue | $187.1B |
| Free Cash Flow | $77.3B |
| Revenue Growth | 65.2% |
| FCF margin | 41.3% |
| Gross margin | 70.1% |
| ROIC | 161.5% |
| Total Debt to Equity | 9.1% |
Investment Thesis
NVIDIA Corporation (NVDA) stands out with a Quality rating of 8.2 and massive scale, boasting a Market Cap of $4,676.7B. The company demonstrates explosive growth with Revenue at $187.1B and Revenue growth of 65.2%, supported by Free Cash Flow of $77.3B and an exceptional FCF margin of 41.3%. Gross margin reaches 70.1%, while ROIC of 161.5% underscores operational efficiency. Total Debt to Equity is a low 9.1%, and 1Y Return of 53.3% reflects strong momentum. At an Intrinsic value of $85.9, this analysis reveals potential value in its AI and semiconductor leadership for long-term positioning.
This profile positions NVDA as a high-quality growth leader in the NVDA analysis, ideal for portfolios seeking tech dominance with superior capital returns.
Key Catalysts
- Unmatched Revenue growth of 65.2% driven by AI demand
- Industry-leading ROIC at 161.5% for sustained compounding
- Strong FCF of $77.3B enabling reinvestment and buybacks
- High Gross margin of 70.1% signaling pricing power
Risk Factors
- Elevated Market Cap may amplify volatility in tech corrections
- Dependence on semiconductor cycles could pressure growth
- High growth expectations risk valuation compression
Stock #2: Microsoft Corporation (MSFT)
| Metric | Value |
|---|---|
| Market Cap | $3,199.2B |
| Quality Rating | 7.4 |
| Intrinsic Value | $424.8 |
| 1Y Return | 4.1% |
| Revenue | $305.5B |
| Free Cash Flow | $77.4B |
| Revenue Growth | 16.7% |
| FCF margin | 25.3% |
| Gross margin | 68.6% |
| ROIC | 26.7% |
| Total Debt to Equity | 14.7% |
Investment Thesis
Microsoft Corporation (MSFT) earns a solid Quality rating of 7.4 with a Market Cap of $3,199.2B. It generates Revenue of $305.5B and Free Cash Flow of $77.4B, with Revenue growth at 16.7% and FCF margin of 25.3%. Gross margin stands at 68.6%, ROIC at 26.7%, and Total Debt to Equity at 14.7%. Despite a modest 1Y Return of 4.1%, the Intrinsic value of $424.8 suggests undervaluation in cloud and software ecosystems, making it a cornerstone for MSFT analysis in diversified holdings.
Key Catalysts
- Steady Revenue growth of 16.7% from Azure and Office
- Robust FCF matching NVIDIA at $77.4B for dividends
- High Gross margin of 68.6% with scalable SaaS model
- Low Total Debt to Equity of 14.7% for financial flexibility
Risk Factors
- Slower 1Y Return indicates potential short-term lag
- Competition in cloud could erode margins
- Regulatory scrutiny on big tech may impact operations
Stock #3: Taiwan Semiconductor Manufacturing Company Limited (TSM)
| Metric | Value |
|---|---|
| Market Cap | $1,730.0B |
| Quality Rating | 8.2 |
| Intrinsic Value | $484.8 |
| 1Y Return | 58.8% |
| Revenue | NT$3,818.9B |
| Free Cash Flow | NT$1,019.8B |
| Revenue Growth | 31.9% |
| FCF margin | 26.7% |
| Gross margin | 59.9% |
| ROIC | 38.2% |
| Total Debt to Equity | 18.2% |
Investment Thesis
Taiwan Semiconductor Manufacturing Company Limited (TSM) scores a top Quality rating of 8.2 and Market Cap of $1,730.0B. Revenue hits NT$3,818.9B with Revenue growth of 31.9%, Free Cash Flow at NT$1,019.8B, and FCF margin of 26.7%. Gross margin is 59.9%, ROIC 38.2%, and Total Debt to Equity 18.2%. 1Y Return of 58.8% aligns with its foundry dominance, while Intrinsic value of $484.8 highlights value in chip manufacturing for TSM analysis.
Key Catalysts
- Strong Revenue growth of 31.9% from advanced nodes
- High ROIC of 38.2% in critical semiconductor supply
- Solid FCF margin supporting global expansion
- Strategic role in AI chip production
Risk Factors
- Geopolitical tensions in Taiwan region
- Cyclical semiconductor demand fluctuations
- Currency risks with NT$ metrics
Stock #4: Broadcom Inc. (AVGO)
| Metric | Value |
|---|---|
| Market Cap | $1,574.3B |
| Quality Rating | 8.2 |
| Intrinsic Value | $131.5 |
| 1Y Return | 53.6% |
| Revenue | $63.9B |
| Free Cash Flow | $26.9B |
| Revenue Growth | 23.9% |
| FCF margin | 42.1% |
| Gross margin | 67.8% |
| ROIC | 18.3% |
| Total Debt to Equity | 80.1% |
Investment Thesis
Broadcom Inc. (AVGO) achieves Quality rating 8.2 with Market Cap $1,574.3B. Revenue is $63.9B, growing 23.9%, with Free Cash Flow $26.9B and FCF margin 42.1%. Gross margin 67.8%, ROIC 18.3%, but higher Total Debt to Equity at 80.1%. 1Y Return 53.6% and Intrinsic value $131.5 position it as a semiconductor powerhouse for AVGO analysis.
Key Catalysts
- Revenue growth 23.9% from networking and custom chips
- Exceptional FCF margin 42.1% for acquisitions
- High Gross margin 67.8% in semis
- VMware integration boosting scale
Risk Factors
- Elevated Total Debt to Equity 80.1%
- Acquisition integration risks
- Competition in connectivity chips
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Stock #5: Visa Inc. (V)
| Metric | Value |
|---|---|
| Market Cap | $628.1B |
| Quality Rating | 7.5 |
| Intrinsic Value | $150.2 |
| 1Y Return | -5.9% |
| Revenue | $41.4B |
| Free Cash Flow | $22.9B |
| Revenue Growth | 12.5% |
| FCF margin | 55.4% |
| Gross margin | 79.1% |
| ROIC | 39.1% |
| Total Debt to Equity | 54.6% |
Investment Thesis
Visa Inc. (V) holds Quality rating 7.5, Market Cap $628.1B. Revenue $41.4B grows 12.5%, Free Cash Flow $22.9B with top FCF margin 55.4%. Gross margin 79.1%, ROIC 39.1%, Total Debt to Equity 54.6%. 1Y Return -5.9% contrasts Intrinsic value $150.2, offering stability in payments for V analysis.
Key Catalysts
- Superior FCF margin 55.4% from network effects
- High ROIC 39.1% in transaction volume
- Gross margin 79.1% with low capex
- Digital payment adoption growth
Risk Factors
- Negative 1Y Return signals consumer spending slowdown
- Fintech disruption risks
- Regulatory pressures on fees
Stock #6: Oracle Corporation (ORCL)
| Metric | Value |
|---|---|
| Market Cap | $474.9B |
| Quality Rating | 6.1 |
| Intrinsic Value | $160.5 |
| 1Y Return | -3.4% |
| Revenue | $61.0B |
| Free Cash Flow | ($13.2B) |
| Revenue Growth | 11.1% |
| FCF margin | (21.6%) |
| Gross margin | 78.0% |
| ROIC | 13.1% |
| Total Debt to Equity | 408.4% |
Investment Thesis
Oracle Corporation (ORCL) has Quality rating 6.1, Market Cap $474.9B. Revenue $61.0B grows 11.1%, but Free Cash Flow is negative $13.2B with FCF margin 21.6%. Strong Gross margin 78.0%, ROIC 13.1%, high Total Debt to Equity 408.4%. 1Y Return -3.4%, Intrinsic value $160.5 for cloud transition in ORCL analysis.
Key Catalysts
- Revenue growth 11.1% in cloud databases
- High Gross margin 78.0% potential
- Enterprise software stickiness
- AI integration opportunities
Risk Factors
- Negative Free Cash Flow $13.2B from investments
- Very high Total Debt to Equity 408.4%
- Cloud migration execution risks
Stock #7: Costco Wholesale Corporation (COST)
| Metric | Value |
|---|---|
| Market Cap | $413.3B |
| Quality Rating | 6.5 |
| Intrinsic Value | $429.4 |
| 1Y Return | -3.9% |
| Revenue | $280.4B |
| Free Cash Flow | $9,003.0M |
| Revenue Growth | 8.3% |
| FCF margin | 3.2% |
| Gross margin | 12.9% |
| ROIC | 21.7% |
| Total Debt to Equity | 26.7% |
Investment Thesis
Costco Wholesale Corporation (COST) rates 6.5 quality, Market Cap $413.3B. Revenue $280.4B grows 8.3%, Free Cash Flow $9,003.0M, FCF margin 3.2%. Low Gross margin 12.9%, ROIC 21.7%, Total Debt to Equity 26.7%. 1Y Return -3.9%, Intrinsic value $429.4 for retail resilience in COST analysis.
Key Catalysts
- Consistent Revenue growth 8.3% membership model
- Solid ROIC 21.7% on scale
- Defensive retail positioning
- Membership fee revenue stability
Risk Factors
- Low FCF margin 3.2% and Gross margin 12.9%
- Consumer spending sensitivity
- Expansion capex pressures
Stock #8: The Home Depot, Inc. (HD)
| Metric | Value |
|---|---|
| Market Cap | $366.7B |
| Quality Rating | 5.8 |
| Intrinsic Value | $240.6 |
| 1Y Return | -9.6% |
| Revenue | $166.2B |
| Free Cash Flow | $13.9B |
| Revenue Growth | 7.5% |
| FCF margin | 8.4% |
| Gross margin | 33.4% |
| ROIC | 19.8% |
| Total Debt to Equity | 486.5% |
Investment Thesis
The Home Depot, Inc. (HD) scores Quality rating 5.8, Market Cap $366.7B. Revenue $166.2B grows 7.5%, Free Cash Flow $13.9B, FCF margin 8.4%. Gross margin 33.4%, ROIC 19.8%, high Total Debt to Equity 486.5%. 1Y Return -9.6%, Intrinsic value $240.6 for housing cycle play in HD analysis.
Key Catalysts
- Steady Revenue growth 7.5% home improvement
- Strong Free Cash Flow $13.9B for returns
- ROIC 19.8% operational strength
- Pro/renovation demand
Risk Factors
- High Total Debt to Equity 486.5%
- Housing market slowdown impacts
- Negative 1Y Return -9.6%
Stock #9: Chevron Corporation (CVX)
| Metric | Value |
|---|---|
| Market Cap | $347.3B |
| Quality Rating | 5.4 |
| Intrinsic Value | $103.8 |
| 1Y Return | 14.4% |
| Revenue | $187.0B |
| Free Cash Flow | $10.8B |
| Revenue Growth | (5.2%) |
| FCF margin | 5.8% |
| Gross margin | 18.4% |
| ROIC | N/A |
| Total Debt to Equity | 21.9% |
Investment Thesis
Chevron Corporation (CVX) has Quality rating 5.4, Market Cap $347.3B. Revenue $187.0B with Revenue growth 5.2%, Free Cash Flow $10.8B, FCF margin 5.8%. Gross margin 18.4%, ROIC N/A, low Total Debt to Equity 21.9%. Positive 1Y Return 14.4%, Intrinsic value $103.8 for energy value in CVX analysis.
Key Catalysts
- Positive 1Y Return 14.4% energy demand
- Solid Free Cash Flow $10.8B dividends
- Low Total Debt to Equity 21.9%
- Oil production resilience
Risk Factors
- Negative Revenue growth 5.2% commodity swings
- Energy transition pressures
- Volatile Gross margin 18.4%
Stock #10: General Electric Company (GE)
| Metric | Value |
|---|---|
| Market Cap | $325.8B |
| Quality Rating | 7.2 |
| Intrinsic Value | $90.5 |
| 1Y Return | 49.5% |
| Revenue | $45.9B |
| Free Cash Flow | $7,264.0M |
| Revenue Growth | 0.2% |
| FCF margin | 15.8% |
| Gross margin | 36.9% |
| ROIC | 20.9% |
| Total Debt to Equity | 108.4% |
Investment Thesis
General Electric Company (GE) rates Quality rating 7.2, Market Cap $325.8B. Revenue $45.9B grows 0.2%, Free Cash Flow $7,264.0M, FCF margin 15.8%. Gross margin 36.9%, ROIC 20.9%, Total Debt to Equity 108.4%. Strong 1Y Return 49.5%, Intrinsic value $90.5 for industrial turnaround in GE analysis.
Key Catalysts
- Impressive 1Y Return 49.5% restructuring
- Improving ROIC 20.9% aviation focus
- Positive FCF margin 15.8%
- Portfolio simplification gains
Risk Factors
- Modest Revenue growth 0.2%
- High Total Debt to Equity 108.4%
- Industrial cycle exposure
Portfolio Diversification Insights
These 10 best stocks blend high-growth tech (NVDA, MSFT, TSM, AVGO ~60% allocation) with defensive consumer (COST, HD), payments (V), software (ORCL), energy (CVX), and industrials (GE). Tech provides growth via high ROIC and revenue surges, balanced by stable FCF from V and COST. Energy adds commodity hedge, reducing correlation risks. Overall, 70% tech/semiconductors, 15% consumer/retail, 10% energy/industrials, 5% payments—ideal for undervalued stocks blending growth and value.
Market Timing & Entry Strategies
Consider entry on pullbacks to intrinsic values, especially for high-quality picks like NVDA/TSM near support levels. Monitor earnings for revenue growth confirmation; tech catalysts shine in AI expansions, while COST/HD suit defensive rotations. Dollar-cost average into diversified baskets, watching debt metrics like ORCL/HD. Track sector rotations—tech on upcycles, energy on oil rebounds—for optimal stock picks positioning.
Explore More Investment Opportunities
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FAQ Section
How were these stocks selected?
Selected via ValueSense criteria focusing on Quality rating, intrinsic value gaps, revenue growth, FCF margins, and ROIC for top stocks to buy now.
What's the best stock from this list?
NVDA leads with 8.2 Quality rating, 65.2% revenue growth, and top ROIC, though TSM/AVGO match quality for semis exposure.
Should I buy all these stocks or diversify?
Diversify across sectors like tech (NVDA/MSFT), retail (COST/HD), and energy (CVX) to balance growth and stability in your stock watchlist.
What are the biggest risks with these picks?
High debt in ORCL/HD, negative FCF in ORCL, cyclicality in semis/energy, and growth slowdowns in consumer stocks.
When is the best time to invest in these stocks?
On dips toward intrinsic value levels, post-earnings validation of catalysts, or during sector rotations favoring tech/value blends.