The Ultimate High Yield Dividend Stock to Buy Now for 2026

• Nomad Foods generates consistent free cash flow each year and is an industry leader in Europe.

• Despite the high-yielding dividend, its distributions are easily covered by its cash generation.

• Besides the dividend, the stock’s share count has declined 4% per year over the past five years.

• 10 stocks we like better than Nomad Foods ›

The stock I’m going to look at in this article probably won’t become a multibagger anytime soon, nor will it be confused with a growth stock. However, as the market as a whole has gravitated toward high-growth stocks — such as artificial intelligence, quantum computing and other next-generation technologies — many stable (perhaps even boring) high-dividend, high-yielding stocks have been left in their wake.

I’m going to highlight one of these trainwreck high-yield stocks and explain why it’s one of my favorite buys for 2026 — especially after it fell 63% from its all-time high.

Based in the United Kingdom Nomadic foods (NYSE: NOMD) is the largest manufacturer and distributor of frozen products in Europe. It is the No. 1 brand in 13 of the 15 countries it serves and ranks No. 2 in the other two countries.

With its brands Birds Eye, iglo and Findus, among others, Nomad generates around two-thirds of its turnover from proteins and vegetables. That makes it an interesting turnaround stock, as its focus on healthier foods – particularly its recently revamped Chicken and Protein Meals – positions the company well to capitalize on a broader shift toward cleaner eating.

Despite serving a frozen food industry that typically grows about 5% a year, Nomad has seen its stock fall more than 60% as it battles inflation, inventory issues, weather disruptions in Europe and a change in CEO. While I strongly dislike management blaming the weather for any challenges, I still believe Nomad is poised for a turnaround thanks to its leadership advantage and the following five reasons.

After making five acquisitions since 2015, Nomad is moving from growing its revenue to streamlining its operations. Management aims to save $200 million between 2026 and 2028 by reducing the number of depots in its supply chain, transforming its procurement process and increasing its production capacity utilization, which currently stands at a paltry 66%.

And management expects capital spending to be cut in half from its three-year average between 2023 and 2025, which should also help increase free cash flow (FCF). Compared to the company’s enterprise value of $4 billion, $200 million in potential savings would be very beneficial.

If these cost savings materialize, management should have excess FCF to continue spending on stock repurchases. Nomad repurchased approximately $175 million of its own shares during the first three quarters of 2025 and has reduced its outstanding shares by 4% annually since 2021.

With the company’s valuation near a ten-year low, these share buybacks are having a powerful impact, simultaneously improving Nomad’s financial numbers while demonstrating confidence in the stock over the long term.

By almost any valuation metric, Nomad Foods appears to be trading at its lowest level in a decade.

At these valuations, the company is essentially considered a dying business, rather than one whose sales have grown 6% annually over the past five years. Yes, Nomad has a lot to prove between its cost-cutting ambitions, innovation in its product lines and the onboarding of a new CEO, Dominic Brisby. However, these risks seem to be more than taken into account in the valuation of the stock.

If you don’t want to take my word about the stock being oversold, co-founder Martin Franklin also believes the stock’s valuation is unusually cheap. During the company’s third quarter earnings conference call, he said:

Due to this disruption, we have prioritized share repurchases as Nomad’s primary use of cash flow after dividend payments. This will remain our capital allocation priority as long as our stocks remain so undervalued.

Further reinforcing this notion, CFO Ruben Baldew announced during the earnings call that he had purchased $1 million worth of Nomad stock with his own money. Insider buying, along with increased share buybacks – all at a once-in-a-decade low valuation – combine to make for an attractive buying opportunity, in my opinion. And that’s not all.

Following the stock’s recent decline, Nomad Foods’ dividend yield increased to 5.8%. But despite this high yield, shareholder payouts only use 46% of the company’s bottom line, leaving plenty of room for continued share buybacks.

Investors will also want to see if Nomad will raise its dividend again this year after raising it 13% from 2024 levels. With consistent net income and FCF each year over the past decade, the dividend should remain relatively safe, although management debates whether to continue repurchasing shares or paying down its manageable debt.

With these reasons, I will be looking to strengthen my position at Nomad Foods throughout the year. I plan to hold the title for at least three to five years, with the hope of many more years beyond that, allowing the composition to work its magic.

As we wait for the company’s cost optimizations and product innovations to take effect, I’m more than happy to see a 5.8% dividend yield while management buys back the shares at a decade-low valuation.

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Josh Kohn-Lindquist holds positions at Nomad Foods. The Motley Fool has no position in any of the securities mentioned. The Motley Fool has a disclosure policy.

The Ultimate High Yield Dividend Stock to Buy Right Now for 2026 was originally published by The Motley Fool.