My Top Two Picks for 2026

January has flown by and it’s been a bit of a whirlwind. The shortened holiday week of the 20^th handed us the worst day for the market since October. The following week the S&P 500 hit an all-time high of 7,000. Gold and silver hit record highs before a swift slide last week.

It’s setting the tone that we are in for an interesting year.

We also have earnings season in full swing. About one-third of S&P 500 companies have reported so far. Of those, 75% reported a positive EPS surprise and 65% a positive revenue surprise. That seems exciting until you put it in perspective.

A surprise is when the released number is better than analysts expected. These are mostly based in math, but there are biases built into their formulations as well. So far, the average year-over-year earnings growth rate is running at 11.9%. If that number sticks through the whole season, it will mark the 5^th consecutive quarter of double-digit earnings growth for the S&P 500.  

Investors seem to be onboard with the optimism as the CNN Fear and Greed Index reads greed. But a closer look shows stock price strength indicating extreme greed while put and call options are signaling extreme fear.

It’s a good thing we have a plan to weather the split personality of Mr. Market. We want our portfolio to generate some extra income and build wealth for the future. And here are my favorite tickers to hit both of these goals.

The Income Generator

When putting your investments to work, if you need extra income right now, that’s the first thing you want to set up. The dividend yield needs to be higher than what is offered by a long-term savings account or a CD.

My top pick for income in 2026 is Hercules Capital (HTGC).

This business development company (BDC) has a current dividend yield of 10.1%. BDCs are investment funds that provide capital to small, mid-sized, or financially distressed companies. Investing in a BDC gives us access to private investments we wouldn’t have otherwise.

HTGC is the largest BDC in the venture lending space. It is primarily focused on the technology and life sciences sectors and has funded over 700 companies during the past two decades. Its current portfolio has around 122 debt investments, 102 warrant holdings, and 78 equity positions.

I need to caution that depending on where you get your stock information, you might see an incorrect yield calculation for Hercules. It currently pays a $0.47 dividend, which includes a $0.40 regular payment plus a $0.07 supplemental. Some sites miss the supplemental, and some others count it twice.

If you’re trying to lock in a double-digit yield, you’ll need to buy shares for under $18.80. A chart of HTGC suggests that shares will continue trading between $17 and $19—a great opportunity to land a great yield.

The Wealth Builder

Any investing dollars not earning extra income should be used to build your wealth for future use. If you reinvest these dividends into more shares, you will unlock the power of compounding and build your nest egg even faster.

My top wealth builder pick for 2026 is The Clorox Company (CLX).

The household giant’s brands are tucked in bathroom cabinets and pantries across the globe. Brita water filters, Fresh Step Cat Litter, Kingsford Charcoal, and Hidden Valley Ranch are all CLX brands.

Just last week the company announced it will acquire GOJO to add to its skin hygiene portfolio. This includes the namesake brand and Purell products. This is an important part of why CLX is a good buy right now.

Shares of the bleach king are down 29% over the past year.

Today, CLX finds itself in a perfect storm of self-inflicted setbacks combined with the broader challenges of the consumer staples industry.

The recent rocky ERP (enterprise resource planning) transition caused a 19% drop in last quarter’s net sales and a further collapse in gross margin. It then lowered guidance for the fiscal year that ends June 30.

Some analyst reports hint that the company doesn’t have a strategy for future growth. That’s why the GOJO deal is so important. CLX hasn’t made an acquisition since March 2018. The GOJO deal, the ERP transition underway, and AI integration could lead to a new chapter in CLX history. And its solid portfolio of brands should support a dividend for many years to come.

These two stocks are a great start to building the core of your portfolio. Even those who like to chase more exciting stocks, Income Generators and Wealth Builders should be the bedrock of your portfolio. This money will keep working for you no matter what happens with the markets.

For more income, now and in the future,

Kelly Green