1 Top Dividend Stock For 2026 That Could Perform Well Even If AI Stocks Fall

Core Viewpoint - Tractor Supply is considered a strong investment opportunity for 2026 despite its underperformance in 2025, as its shares are viewed as undervalued with improving business fundamentals [1] Group 1: Business Performance - Tractor Supply's shares fell in 2025 while the S&P 500 rose, indicating a potential buying opportunity [1] - The company has shown improving business metrics, with third-quarter net sales growing by 7.2% year over year and comparable-store sales increasing by 3.9% [10] - Earnings per share (EPS) grew by 8.6% year over year in the third quarter, a significant acceleration from the previous quarter's 2.8% growth [10] Group 2: Dividend Insights - The annualized dividend is $0.92 per share, yielding 1.8%, which is sustainable given a payout ratio of 44% [6][12] - The company increased its dividend by 4.5% recently, but historically, it has provided double-digit raises [7] - Future dividend growth is expected to return to high single-digit rates as the company normalizes its business growth [8] Group 3: Growth Projections - Management projects annualized sales growth of 6% to 8% from 2025 to 2030, with EPS expected to compound at 8% to 11% [11] - Key drivers for this growth include comparable-store sales growth of 3% to 5%, operating margin expansion, and new store openings [11] Group 4: Market Position - Tractor Supply's business model is seen as a stable alternative to AI-focused stocks, which may face volatility in 2026 [2][3] - The company is currently valued at 24 times earnings, which is considered attractive given its growth potential and dividend sustainability [12]