Forget the automakers: Deutsche Telekom, RE Royalties, and BASF are the new anchors for your income in 2026

Deutsche Telekom – T-Mobile US remains the key growth driver

To understand Deutsche Telekom's momentum, one must look to America. Its US subsidiary, T-Mobile, has developed into a reliable cash flow generator, delivering record figures quarter after quarter. Revenue of just under EUR 78 billion is expected there for 2025, with forecasts for 2026 already exceeding EUR 80 billion. The operational strength across the Atlantic creates the financial leeway that the management board needs for its ambitious plans in Europe and for shareholder remuneration.

The strong cash position directly benefits shareholders. For 2025, the Group is promising a record dividend of EUR 1.00 per share, a significant step up. In addition, there is an ongoing share buyback program with a volume of up to EUR 2 billion, which is already being implemented. This combination of growing dividends and capital repatriation underscores the confidence of management. The average annual dividend growth rate was recently nearly 8%, which makes Telekom increasingly attractive to investors focused on predictable returns.

The crucial question is whether the growth narrative will hold up. Analysts believe the stock could reach around EUR 35 in the long term, but there are also critical voices. The challenges in the German fixed-line business and the high investments in fiber optics and artificial intelligence are dampening the euphoria. Those looking for a steady stream of income will find a solid value here. The dividend policy is predictable, and a further increase is on the horizon for 2026. For investors seeking growth, the US remains the decisive factor. At the same time, uncertainty remains as to whether this engine will continue to run so strongly. The stock is currently trading at EUR 32.98.

RE Royalties - Continues to expand its solar commitment in the US

Vancouver-based financing company RE Royalties is consistently pushing ahead with its expansion in the American solar market. With a second investment tranche of USD 800,000, the total investment in the partnership with developer Solaris Energy, which began in January, now amounts to USD 3.8 million. The total volume of the agreement is up to USD 9 million for two project portfolios with decentralized solar power plants. The first tranche comprises 15 individual projects in five states (California, Maine, Delaware, New Hampshire, and Colorado), 9 of which are already under construction. The structured financing with milestone-based payments and a minimum return over 25 years demonstrates how the company is scaling its royalty model in the commercial and industrial solar power generation segment.

RE Royalties' business model combines traditional project financing with long-term revenue sharing. By granting secured loans to project developers, the company secures not only interest income but also royalty shares in future revenues. The capital recycling effect is crucial for scalability. Once the short-term bridge financing has been repaid after an average of three years, the capital is available for new investments. With a lean cost structure and only nine employees, the existing portfolio of over 100 royalties can be managed without any significant increase in personnel. The internal rate of return on the projects is around 18%.

The almost complete repayment of the Series 1 green bonds issued five years ago, with a volume of around CAD 10 million, signals solid financial discipline. The framework, rated "dark green" by S&P, had exclusively financed climate-friendly projects. The project pipeline currently includes letters of intent worth CAD 50 million for solar, wind, and storage projects in North America and the Maldives. The company has paid dividends continuously for 6.5 years. With a policy recently changed to annual payments, this results in a double-digit dividend yield based on the current share price. This figure shows that the business model of predictable cash flows from long-term contractually secured energy projects is profitable. The share is currently trading at CAD 0.34.

BASF – Between headwinds and a change in strategy

The Ludwigshafen-based chemical company has presented its preliminary figures for 2025, and they are mixed. Revenue fell to EUR 59.7 billion, slightly below the previous year's level. At EUR 6.6 billion, operating profit fell short of the company's own expectations, mainly due to margin pressure and currency effects. At the same time, there is a clear ray of hope. Free cash flow nearly doubled to EUR 1.3 billion, significantly exceeding forecasts. This was made possible by lower capital expenditure, a sign of greater financial discipline. However, there is no sign of an operational recovery for the time being.

The Group is pushing ahead with its restructuring faster than planned. Special expenses of around EUR 1.3 billion weighed on earnings in 2025. This shows how serious management is about its cost-cutting measures. At the same time, new structures are emerging. BASF is opening a global digital hub in Hyderabad to organize services more efficiently and cost-effectively. There are also developments on the technological front. A fully automated AI laboratory for formulation testing and collaboration with ExxonMobil on low-emission hydrogen are concrete steps toward future markets. The course has been set for more profitable growth, but operational implementation will still take time.

Analysts expect a gradual improvement in operations by 2026, provided that the economy picks up and price pressure eases. The stock currently offers a dividend yield of a good 5% with a guaranteed minimum distribution of EUR 2.25 per share through 2028. In addition, a share buyback program worth EUR 1.5 billion has been running since November. Whether the dividend can be financed from the company's own resources in the long term depends on the further development of cash flow. Investors with staying power and an interest in ongoing returns will find a solid basis here, as long as they can cope with the cyclical fluctuations of the chemical market. The share price is currently trading at EUR 51.00.

Investors looking for reliable returns in 2026 will have to look beyond traditional dividend stocks. Deutsche Telekom is proving that its American growth engine T-Mobile is the decisive force behind rising dividends. RE Royalties shows how a lean royalty model in the renewable energy sector can scale double-digit returns. And BASF is battling its way through margin pressure with far-reaching restructuring and guaranteed distributions.