Evercore ISI has updated its ‘Best Core Ideas’ list, adding dividend payers Humana and NRG Energy, both rated ‘outperform’ for at least a one-year investment horizon. Health insurer Humana is noted for its Medicare Advantage margin improvements and potential 2027 Stars rating regain, while utilities firm NRG Energy is praised for its ‘Virtual Power Plants’ and integrated flexibility stack despite recent share weakness. The list also includes other strong dividend stocks like Chevron, Texas Instruments, and McDonald’s.
Evercore ISI has unveiled its updated 'Best Core Ideas' list, spotlighting a pair of prominent dividend-paying companies: health insurer Humana and utilities giant NRG Energy. These selections are based on an investment horizon of at least one year, with all included stocks carrying an 'outperform' rating from Evercore's analyst team.
Humana (HUM) has seen its shares climb over 40% year-to-date and offers a modest dividend yield of approximately 1%. Evercore analyst Elizabeth Anderson projects a significant 28% upside from Monday's closing price, setting a target of $480. Anderson attributes this positive outlook to enhanced pricing discipline, which is expected to materially improve Medicare Advantage (MA) margin prospects. The company is strategically prioritizing profitability over sheer growth in its 2027 Medicare Advantage bids.
A critical driver for Humana’s future earnings per share (EPS) hinges on improving its largest Medicare Advantage plan, H5216, to regain a 4-star rating from the Centers for Medicare & Medicaid Services (CMS). Currently rated 3.5 out of 5 stars, such an improvement could be a pivotal factor for its 2028 EPS. Anderson notes that while 2026 performance is largely priced in, the focus is now on the potential for Humana to regain its 2027 Stars rating, with Evercore's analysis suggesting upside risk. Wall Street generally shares this optimism, with 13 of 29 analysts polled by LSEG recommending a 'buy' or 'strong buy', anticipating more than 10% upside.
NRG Energy (NRG) also secures a spot on Evercore’s coveted list, despite a recent sell-off following the company's reaffirmation of its full-year guidance. NRG's adjusted earnings per share forecast of $7.90 to $9.90 (compared to a FactSet consensus of $9.21) and adherence to adjusted EBITDA and net income projections, which align with consensus estimates, suggest that the market might be overlooking key strengths.
Analyst Nicholas Amicucci highlights NRG's 'integrated flexibility stack,' particularly its innovative 'Virtual Power Plants' (VPPs), as an underappreciated asset. These VPPs combine various energy sources, including solar panels and batteries, to generate and store electricity efficiently. Amicucci's price target of $215 implies a substantial 55% upside from Monday's close. He emphasizes that this integrated approach uniquely positions NRG to address both speed-to-power and affordability, noting significant progress with over 200 MW in the Texas residential VPP program against a 1 GW target, alongside 1.5 GW of Texas Energy Fund projects on schedule. The Texas Energy Fund provides crucial loans for natural gas power generation. Despite a 25% dip in shares in 2026, NRG offers a competitive dividend yield of 1.6%, and analysts remain largely bullish, with 15 out of 18 rating it a 'buy' or 'strong buy' according to LSEG, projecting about 67% upside.
Beyond these new additions, Evercore's 'Best Core Ideas' list also features other notable dividend payers. These include Chevron, which has climbed 25% in 2026 and boasts a 3.7% dividend yield; Texas Instruments, up 64% year-to-date with approximately a 2% dividend yield; and McDonald's, off 13% this year but still offering a 2.8% dividend yield.
