At this point in time, DVDs still bring in a lot more revenue per customer than online streaming subscriptions do (which is many orders of magnitude more than the ads in free legit online streams provide), but by the same token sometimes the money may be supporting different people along the way. The overseas anime industry generally consists of various middlemen who translate, publish, and distribute the work (whether online or on physical media), but some money does go back to the rightsholders in one way or another.
You might be interested to read
this series of ANN articles which provides some relevant information about how licensing works.
Now, if you really want to support the Japanese anime industry more directly and are willing to spend a bit more (or sometimes a lot more) to do it, there are a ton of products being sold at every price point in Japan for nearly every show that's airing. The product that would seem to bring in the most direct revenue in Japan is the DVDs and Blu-Rays, which are many times more expensive than their licensed equivalents. But there are also CD, Games, Books, Figures, Character Goods, and so on, all of which bring some money back to the Production Committee in various ways. Some of these products are easier than others for foreigners to import, keeping in mind that many of them are not translated into English (so you may be buying them purely as keepsakes, rather than for their practical value).
But we're probably getting way ahead of ourselves here. A subscription to legit streaming services is a good place to start, and supporting your favourite shows by buying the license DVDs/Blu-Rays does help.