Bolster your portfolio with these dividend-paying cash cows as midterms approach
Summer is winding down, and a new catalyst is on the horizon in the form of midterm elections.
A handful of steady cash cow stocks can provide your portfolio with some stability, according to market data analytics firm ISS Stoxx. Elections are roughly 10 weeks out , and Democrats are favored to win at least one chamber of Congress in November, according to FiftyPlusOne.
Legislative gridlock could be likely in a divided Washington. To that end, ISS Stoxx used its Economic Value Added framework, known as EVA, to screen the Russell 1000 for cash cow stocks that score high for profitability and low for risk.
"Quality has generated the most alpha in the 12 months following a midterm election where a Republican president loses full control of Congress," wrote Casey Lea, global director of quantitative research at ISS Stoxx EVA. "High profit and low risk themes have some of the best performance," Lea added. See below for a few names that made the cut.
Beverage and snacks giant PepsiCo showed up on the screen. The stock is a member of the elite Dividend Kings club, consistently lifting its dividend payment for more than 50 years. A 4% increase just this February made 2026 the 54th consecutive year of dividend hikes.
The stock is down almost 2% year to date, and it pays a current dividend yield of 4.2%. Consumers stateside have been grappling with tighter budgets due to sticky inflation and higher gasoline prices – and this contributed to PepsiCo's earnings miss in the second quarter. International consumers seem to be willing to spend a little more, however, Piper Sandler analyst Michael Lavery said in a note last week.
"PEP's US organic growth recovery remains a slow process, and PEP is learning how to best adapt to the current consumer environment, but International growth momentum remains strong," he wrote. "International growth is margin accretive, and we believe it can continue at current levels in 2H26." Lavery stuck with his overweight rating on the stock.
His price target of $176 suggests about 26% upside from Thursday's close. Bank of New York Mellon also made the list. Shares have surged nearly 40% year to date and pay a dividend yield of about 1.6%.
In June, Bank of America called out BNY as a buy-rated stock that can navigate a higher-for-longer rate backdrop. BNY has "an attractive combination of a capital light, high [return on equity] business with limited credit risk and sticky client relationships," Bank of America analyst Ebrahim Poonawala wrote in a client note.
Indeed, fed funds futures trading now suggests a nearly 58% likelihood of the Federal Reserve lifting rates in September. This came after Fed Chairman Kevin Warsh said on Friday at Jackson Hole: "While this summer's [inflation] readings were better than expected, they do not tell me that underlying trends have meaningfully improved." Finally, payments giant Visa emerged on ISS's list.
Shares are up nearly 9% in 2026 and have a modest dividend yield of 0.7%. Last month, Bank of America dubbed Visa a "quality compounder," reiterating its buy rating on the stock and lifting its price target to $430, which suggests upside of about 13% from Thursday's close.
"Visa remains one of the highest quality compounders in payments, with the F3Q beat and slight FY raise reinforcing the model's durability," wrote BofA's Matthew O'Neill. "Net, the setup looks steady, with Visa's diversified network and lower Middle East exposure keeping any slowdown less pronounced than peers," he added. CNBC's Garrett Downs and Michael Bloom contributed reporting.