This post covers the 10 best blue-chip stocks with dividends. Inflation worries investors. According to the New York Times, BofA analyst Ethan Harris forecasted a 40% chance of a recession next year.
The analyst forecasts that economic growth will practically stop in the second half of 2023. Deutsche Bank anticipates an early recession and 0.5% growth in 2023.
Due to the economy and 2022 tech market sell-off, investors now favor dividend-paying blue-chip stocks over high-growth tech stocks. Because they routinely pay dividends, Exxon Mobil Corporation (NYSE: XOM), PepsiCo, Inc. (NASDAQ: PEP), and The Procter & Gamble Company (NYSE: PG) attract investors.
Dividend equities have outperformed rivals under economic instability. According to Fidelity, high dividend payers beat the market in the last two bear markets. According to the analysis, dividends made up half of the S&P 500’s gains during the past 30 years.
Key Takeaways
- How to invest in blue-chip stocks with dividends
- 10 best blue-chip stocks with dividends to buy Now
- Answers to some of the frequently asked questions
How To Invest In Blue-Chip Stocks With Dividends
1. Buy individual company shares
Most trading platforms let you buy shares in the UK and blue-chip foreign businesses. Consider the following:
Blue chip firms have significant trading volumes, making buying and selling shares easier. Smaller firms may differ.
Buy-sell spread: blue chip stocks’ strong liquidity reduces the broker’s “margin” on share trades. FTSE 100 Barclays has a buy-sell price difference of 0.02%, whereas smaller-cap Topps Tiles has almost 4%. (on one of the major trading platforms). To “break even,” Topps Tiles’ share price must grow 4%.
High share price: certain blue chip stocks have high share prices, making minor investments harder. Berkshire Hathaway’s £360,000 share price dwarfs AstraZeneca’s £108 per share. Some trading platforms provide fractional share ownership or split to lower share prices.
Dealing fees: most trading platforms charge £5-10 for each share transaction. Some demand annual platform fees for holding shares. Buying non-UK shares requires a 0.5-1.5% foreign exchange cost. Foreign exchange fluctuations can lower the value of pounds sterling investments.
2. Buy Blue Chips Indirectly
A portfolio of blue chip stocks can offer investors upside if share prices rise without the risk of a single business succeeding. Two main choices:
Index or tracker funds: exchange-traded funds that replicate an index with a high percentage of blue chip businesses, like the FTSE 100 or S&P 500. Algorithms passively manage these funds; therefore, the yearly management charge is 0.1-0.25%.
Actively-managed funds: Vanguard US Growth and Fidelity Blue Chip Growth Funds invest in large-cap, blue-chip stocks. Actively managed funds charge 0.5-1.0% yearly management fees.
10 Best Blue-Chip Stocks With Dividends To Buy Now
We selected dependable, long-standing businesses with solid dividend records for this list.
Additionally, these businesses have consistently demonstrated substantial financial success over time, providing solid investment prospects in the current financial climate. The yields of the stocks are used to rank them.
1. UnitedHealth Group Incorporated (NYSE: UNH)
Dividend Yield as of August 26: 1.22%
Consumers can obtain insurance and medical services from UnitedHealth Group Incorporated (NYSE: UNH). On August 17, the business announced a quarterly dividend at the same rate as before: $1.65 per share.
In 1990, it began paying annual dividends; in 2010, it switched to quarterly payouts. The company has increased its distribution by 130% over the past five years, continuing a 12-year trend of dividend increases. The stock’s dividend yield was 1.22% as of August.
UnitedHealth Group Incorporated (NYSE: UNH) reported 2022 sales of $80.3 billion, up 13% from the prior quarter. Operating earnings rose 19% annually to $7.1 billion.
Operations yielded $6.9 billion. UnitedHealth Group Incorporated (NYSE: UNH) has invested $4 billion in dividends and share repurchases.
Based on the company’s better business outlook, Mizuho raised its price target for UnitedHealth Group Incorporated (NYSE: UNH) to $600 in August and maintained a Buy rating.
In 2022, 91 hedge funds in Insider Monkey’s database owned UnitedHealth Group Incorporated (NYSE: UNH), down from 103. These interests total $11 billion. In the second quarter, GQG Partners held the company’s largest holding at nearly $1.6 billion.
In uncertain economic times, UNH is another blue-chip dividend firm to consider.
2. Accenture plc (NYSE: ACN)
As of August 26, the dividend yield was 1.25%.
Accenture plc (NYSE: ACN), an Irish-American information technology business, focuses on consultancy and related services. Baird increased the business’s price objective in August to $338 while highlighting its purchase of a software company with headquarters in Indonesia. The business thinks that this acquisition might increase the firm’s annualized revenue.
Accenture plc (NYSE: ACN) reported new bookings of $17 billion in fiscal 2022, the second-highest amount ever for the company. The company’s quarterly revenue increased by 21.9% year over year to $16.16 billion. In addition, its operating income increased by 23% to $2.6 billion from the previous year.
As of August 26, Accenture plc (NYSE: ACN) paid a $0.97 quarterly dividend per share for a dividend yield of 1.25%. For the past 16 years, the corporation has continuously increased its dividends. It distributed $614 million in dividends to stockholders in Q3 of its fiscal year.
According to the 2022 database maintained by Insider Monkey, 61 hedge funds held positions in Accenture plc (NYSE: ACN), down from 63 during the previous quarter. These interests are worth more than $3.1 billion in total.
3. American Express Company (NYSE: AXP)
As of August 26 has a dividend yield of 1.28%.
American Express Company (NYSE: AXP), a worldwide American provider of credit card services, was included in 67 hedge fund portfolios as of 2022, according to data from Insider Monkey.
These hedge funds have investments worth more than $25.2 billion in total. Berkshire Hathaway was the company’s largest shareholder, with approximately $21 billion in holdings.
American Express Company (NYSE: AXP) reported that its sales increased 30.9% year over year to $13.4 billion in the second quarter of 2022.
This gain was fueled by a rise in cardholder expenditure when compared to the same time last year. For FY22, the business estimates sales growth of 23% to 25%.
American Express Company (NYSE: AXP) increased its quarterly dividend by 20% in March to $0.52 per share. For the past 30 years, the corporation has consistently paid dividends. The stock’s dividend yield was 1.28% as of August 26.
RBC Capital increased its price target on American Express Company (NYSE: AXP) to $180 in July. It kept the shares’ Sector Perform rating, highlighting the company’s fundamental billing activity and expanding revenue.
4. NextEra Energy, Inc. (NYSE: NEE)
As of August 26, the dividend yield was 1.90%.
American energy services provider NextEra Energy, Inc. (NYSE: NEE) announced impressive performance for 2022. The business reported $5.1 billion in revenue, an increase of 31.8% from the previous year.
The current quarter, when it had an operating cash flow of $1.9 billion compared to the prior quarter, saw a $2.8 billion operating cash flow. Free cash flow for the business was $606 million, while $629 million was available in cash and cash equivalents.
For the past 28 years, NextEra Energy, Inc. (NYSE: NEE) has continuously increased its dividends. As of August 26, its quarterly distribution was $0.425 per share, with a dividend yield of 1.90%.
Morgan Stanley boosted its growth rate projections for clean energy equities in August, raising its price target on NextEra Energy, Inc. (NYSE: NEE) to $94 with an Equal Weight rating.
Fisher Asset Management became NextEra Energy, Inc.’s (NYSE: NEE) top shareholder in 2022, with over $1.2 billion in stakes. In addition, 59 hedge funds with approximately $2.76 billion holdings in Insider Monkey’s database held positions in the Florida-based company.
5. McDonald’s Corporation (NYSE: MCD)
A dividend yield of 2.10% as of August 26.
McDonald’s Corporation (NYSE: MCD) is a significant global retailer of food service products and a multinational American fast food business.
With an Outperform rating and a higher price objective for the stock in August, BMO Capital emphasized the company’s post-pandemic fast growth and boosted its price goal on the stock to $300.
McDonald’s Corporation (NYSE: MCD) said its global comparable sales increased by 9.7% in 2022, with growth in all business segments. Sales for the corporation increased by 4%, and digital sales in its top six regions for the quarter surpassed $6 billion.
McDonald’s Corporation (NYSE: MCD) has consistently raised dividends for 46 years. As of August 26, it yielded 2.10% and paid $1.38 per share quarterly. MCD might be an excellent dividend investment with Exxon Mobil Corporation (NYSE: XOM), PepsiCo, Inc. (NASDAQ: PEP), and Procter & Gamble Company (NYSE: PG).
50 Insider Monkey-tracked hedge funds owned McDonald’s Corporation (NYSE: MCD) at the end of 2022, down from 58 a quarter earlier. These holdings exceed $2.3 billion.
6. The Hanover Insurance Group (NYSE: THG)
2.24% was the dividend yield as of August 26.
Customers of The Hanover Insurance Group, Inc. (NYSE: THG) can obtain business, home, and vehicle insurance services. Morgan Stanley began covering the stock in June with an Equal Weight rating and a $155 price objective. Given the current economic climate, the firm valued the company’s solid financial sheet.
The Hanover Insurance Group, Inc. (NYSE: THG) owned over $9.6 billion in cash and investment assets at the end of June, and it had close to $146 million in cash and cash equivalents on hand.
The business’s second-quarter revenue increased by 9.9% yearly to $1.33 billion. For 17 years running, The Hanover Insurance Group, Inc. (NYSE: THG) has increased its dividends. As of August 26, it had a dividend yield of 2.24% and paid a quarterly dividend of $0.75 per share.
15 hedge funds have interests in The Hanover Insurance Group, Inc. (NYSE: THG), worth close to $64 million, according to Insider Monkey’s 2022 database. 21 hedge funds held over $97.4 million worth of interests in the insurance company during the previous quarter.
7. Hormel Foods Corporation (NYSE: HRL)
As of August 26, the dividend yield was 2.02%.
An American food processing business specializing in packaging and marketing various food products is called Hormel Foods Corporation (NYSE: HRL).
The company reported impressive results, with $3.1 billion in revenue growing by 18.8% yearly. Its operating cash flow increased by 24% to $193 million. At the end of the quarter, the company had $861.7 million in cash and cash equivalents on hand.
In November 2021, Hormel Foods Corporation (NYSE: HRL) will raise its $0.26 quarterly dividend by 6%. This dividend increase extended the company’s 56-year run. August 26’s dividend yield was 2.02%.
Stephens’ August presentation of a positive outlook for Hormel Foods Corporation (NYSE: HRL) emphasized the company’s underlying growth. The company kept its Equal Weight rating and raised its price objective to $55.
At the end of 2022, 27 hedge funds in Insider Monkey’s database held Hormel Foods Corporation (NYSE: HRL), down from 30 the quarter before. Investments exceed $434.5 million. Renaissance Technologies owned 3 million shares.
8. Sonoco Products Company (NYSE: SON)
2.98% was the dividend yield as of August 26.
Located in South Carolina, Sonoco Products Company (NYSE: SON) is a global supplier of industrial and consumer packaging goods. According to Insider Monkey’s data, the firm was a favorite stock among hedge funds in 2022, as 22 funds were positive on it, up from 17 in the previous quarter. These interests are worth around $187 million in total.
Sonoco Products Company (NYSE: SON) announced revenue of $1.91 billion for 2022, representing a rise of 38.4% from the previous year. The company’s cash flow during the first half of 2022 totaled $184.5 million, up from $102 million for the comparable period in 2021. Additionally, its free cash flow increased to $40.3 million from $9.4 million at the same time last year. The corporation has paid out $91.5 million in dividends as of June.
One of the packaging industry’s longest dividend payment histories is Sonoco Products Company (NYSE: SON), which has raised its dividends continuously for 38 years. It has a yield of 2.98% as of August 26 and pays a quarterly dividend of $0.49 per share.
As Sonoco Products Business (NYSE: SON) boosted its exposure to more defensive consumer markets, Citigroup began covering the company in July with a Buy rating and a $66 price target.
9. State Street Corporation (NYSE: STT)
As of August 26, the dividend yield was 3.52%.
One of the first financial services firms, State Street Corporation (NYSE: STT), has its corporate headquarters in Boston. The company has maintained a 12-year dividend growth streak while paying dividends for the past 24 years. As of August 26, it had a dividend yield of 3.52% and paid a quarterly dividend of $0.63 per share.
State Street Corporation (NYSE: STT) reported a 25% increase in second-quarter 2022 net interest income due to higher loan levels. After the quarter, the company’s AUM was above $3.5 trillion, and cash inflows continued. It also paid $210 million in quarterly dividends.
State Street Corporation (NYSE: STT )’s fundamentals led Deutsche Bank to raise its price target to $74 while maintaining a Hold rating.
According to Insider Monkey, State Street Corporation (NYSE: STT) hedge fund positions rose from 29 to 41 in 2022. These assets exceed $667.6 million., Boston-based Harris Associates owned over 6 million shares.
10. Lincoln National Corporation (NYSE: LNC)
3.63% was the dividend yield as of August 26.
The American insurance provider Lincoln National Corporation (NYSE: LNC) provides various insurance and investment management services through its subsidiary firms. Elite funds favored the firm as a buy-in in 2022, increasing their positions to 34 from 25 the quarter before. These funds have stakes worth a total of $451.4 million.
Lincoln National Corporation (NYSE: LNC) received an Overweight rating from JPMorgan in July, with a price target of $77. The analyst noted the insurance company’s edge over rising premiums and reducing Covid instances.
With a dividend yield of $3.63%, Lincoln National Corporation (NYSE: LNC) pays a quarterly dividend of $0.45 per share. The corporation has an 11-year history of steadily increasing dividends.
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Conclusion
Investor interest has shifted from high growth to so-called “blue chip” businesses as the long bull market run in technology equities finally ran out of steam.
Due to this, the heavily weighted Nasdaq Composite index in the US has fallen more than 20% this year compared to the largely tech-heavy FTSE 100 index’s relatively moderate decline of just 0.3%.
During an economic downturn or a time of high inflation, like the one we are currently experiencing, blue chip stocks frequently appeal to investors.
They typically work in more protective industries like energy, basic goods, and pharmaceuticals, which can withstand a decline in consumer expenditure.
FAQs
What Stocks Pay The Highest Monthly Dividend?
High-Yield Monthly Dividend Stock #3 of Ellington Financial (EFC): AGNC Investment Corporation (AGNC) Broadmark Realty Capital (BMRK) is the second highest-yielding monthly dividend stock. ARMOUR Residential REIT is the highest-yielding monthly dividend stock (ARR)
What Is The Cheapest Stock To Buy That Pays Dividends?
Annaly Capital Management Inc. (NLY)
What Is The Most Reliable Stock To Buy?
Berkshire Hathaway is among the safest stocks to purchase. NYSE: BRK)
Disney Corporation.
What Is The Most Consistent Stock?
They are great investments for long-term investors due to their stability in producing profits, which generates significant long-term returns and consistent dividend increases.
Do You Pay Taxes On Dividends?
Except for dividends repatriated into Nigeria through government-approved methods, dividends received from non-resident corporations are taxable (i.e., any financial institution authorized by the Central Bank of Nigeria to deal in foreign currency transactions).
How Can I Earn 1000 A Month In Dividends?
You’ll need to put about $400,000 into dividend stocks if you want to earn $1,000 per month in dividends. The dividend yields of the equities you purchase for your portfolio will determine the exact amount.
Determine how much money you can set aside each month to expand your portfolio by taking a closer look at your budget.
How Many Dividend Stocks Should I Own?
To lessen the company-specific risk, hold 20–60 stocks. Equal weight for each slot. Don’t put more than 25% of your money in a single sector. Focus on businesses with Safe or Very Safe Dividend Safety Scores.
You can learn more from the video below:
About Author
- I am a professional article and e-book writer with 4 years of experience, I write on well research content on cryptocurrency, stocks, loans and finances.
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