Ah, the magic of blue-chip stocks cannot be understated. Not only can they provide steady growth, but also excellent dividend growth as well. These two factors make them compounding powerhouses. Now, if only you could discover some of the best blue-chip stocks out there.
I am here to help, but before I go into my favorite blue chips, go ahead and check out the sister article “Blue Chip Stocks: Tasty Growth and Yummy Dividends.” If you are new to the world of investing, please start with this article, “How We Plan to Retire on Dividends (book).”
These are the blue chips I hold across my five dividend portfolios. I invest in each of these stocks either weekly or monthly. STASH is the best app for investing weekly into multiple separate companies.
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I will write a quick sentence or two about the company and whether the dividend yield is low (1-1.5%), medium (1.6-3.5%), or high (3.6% or higher). Also, I will list the dividend payout months. January (refers to January, April, July, and October). February (refers to February, May, August, and November). March (refers to March, June, September, and December). I will also list their sectors. Let’s begin.
1. McDonald’s (MCD) Dividend yield: Medium Sector: Consumer Discretionary Dividend: March
Boy, do I love McDonald’s. I don’t know which is better, their stock or their food—this is by far my favorite blue chips stock. They are a restaurant powerhouse and have an excellent yield along with good growth. I am so proud to own MCD.
2. Coca Cola (KO) Dividend yield: Medium Sector: Consumer Discretionary Dividend: January
Coke has been around a long time. You buy Coke for their dividend yield and their ability to stick around for a long time. They have done a great job of diversifying their products over time—and I foresee that continuing.
3. Realty Income (O) Dividend yield: High Sector: Real Estate Dividend: Monthly
Realty Income is a Real Estate Investment Trust (REIT) that specializes in triple net lease properties. This means they own the land, and the tenant pays most of the bills, including property taxes. Taco Bell is one of their main tenants. They produce a tremendous monthly dividend.
4. Altria (MO) Dividend yield: High Sector: Consumer Staples Dividend: January
Altria is a tobacco company, so many people avoid it. I’ll keep my dividends coming in. Government leadership is trying to force cigarettes out of existence, so Altria is pivoting to other sources of income like IQOS heat-not-burn cigarettes.
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5. Phillip Morris (PM) Dividend yield: High Sector: Consumer Staples Dividend: January
Phillip Morris is also a tobacco company, just like Altria. In fact, they were once one company. All the same guidance applies to Altria. Buy for the dividends.
6. AT&T (T) Dividend yield: High Sector: Comm Services Dividend: February
AT&T is one of the most discussed stocks on the market because of its super high yield (7%). There is talk of a dividend cut that would potentially increase growth. In its current form, but for the dividends. One of my favorite stocks. AT&T paydays are amazing.
7. Abbvie (ABBV) Dividend yield: High Sector: Healthcare Dividend: February
One of the few companies with high growth and high dividend yield. People avoid this stock because of the pending loss of the Humira patent. This means that other companies can build generic drugs off of the Humira protocol. I am still a huge fan and a big investor.
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8. Kinder Morgan (KMI) Dividend yield: High Sector: Energy Dividend: February
Kinder Morgan operates natural gas pipelines throughout North America. A nice, boring stock that pays a huge dividend. Energy is usually dull, but those dividends are very exciting. Invest for the dividend.
9. Pfizer (PFE) Dividend yield: High Sector: Healthcare Dividend: March
We saw how vital Pfizer is during the pandemic. The best growth years may be behind the stock, but the dividend is a great reason to hold Pfizer. The company is still a cash flow king, so I am buying as much as I can.
10. Pepsi (PEP) Dividend yield: Medium Sector: Consumer Discretionary Dividend: March
Pepsi is everywhere, even places you aren’t looking for them. Look at the graph above. The dividend is healthy, and there may be some small growth coming. I buy them because Pepsi will be around for a long time. My grandkids will be drinking Pepsi and Coke (hopefully Coke).
11. Walmart (WMT) Dividend yield: Low Sector: Consumer Staples Dividend: January
We saw how important Walmart was during the pandemic. I know it felt great to get out and go to Walmart during the lockdown. Growth is slow, and the dividend is low, but I like it as a long-term play. As much as Amazon is taking over for online shopping, a neighborhood isn’t great unless Walmart moves in. The dividend moves between months, which is somewhat weird.
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12. Prudential Financial (PRU) Dividend yield: High Sector: Financial Dividend: March
Insurance is super dull, making Prudential one of my most boring companies. However, I get excited every time my PRU dividends come through my Cash App. Huge dividends and some growth over time, it’s hard to lose with Prudential.
13. T. Rowe (TROW) Dividend yield: Medium Sector: Financial Dividend: March
T. Rowe Price provides financial services to individuals, companies, retirement plans, etc., including managing portfolios. In layman’s terms, they manage mutual funds, along with much more. Managed funds will always be popular because many people fear getting into the stock market without guidance. The growth on this stock is impressive, plus a good dividend. Buy this stock for both growth and dividend.
14. Procter & Gamble (PG) Dividend yield: Medium Sector: Consumer Staples Dividend: February
Procter & Gamble was huge during the pandemic. PG brands include Tide, Gain, Charmin, Covergirl, and Febreeze. So I have been buying PG brands for a long time, may as well buy the stock. Medium growth and medium dividends make for a great long-term play.
15. Verizon (VZ) Dividend yield: High Sector: Comm Services Dividend: February
Verizon’s best years of growth may be behind it, but everyone needs a cellphone. The dividend is a great reason to invest and continue to dollar-cost average in. They usually pay on the same day as AT&T, which makes for a fabulous February 1st!
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16. Apple (APPL) Dividend yield: Low Sector: Information Tech. Dividend: February
Apple is still a high-growth stock and has years of extraordinary returns for investors ahead. Heck, I am thinking of buying the new iMac, and I haven’t bought an Apple product in four years. However, the dividend yield is super low (about 0.70% today). Buy, hold, and continue to buy for a long time. I predict that they will become a dividend powerhouse in roughly 20 years.
17. Public Storage (PSA) Dividend yield: Medium Sector: Real Estate Dividend: March
Self-Storage is a vast business, and it is still growing year over year. Public Storage is a blue-chip REIT and in the S&P 500. Why not get those rental income profits via dividends. PSA is still a growth company, and the dividend is medium as well. An outstanding buy-and-hold stock.
18. Johnson & Johnson (JNJ) Dividend yield: Medium Sector: Healthcare Dividend: March
Johnson & Johnson has been around for a long time and has been paying a dividend for many years. They are still growing, and we saw how valuable they are during the pandemic. Some of their brands include Tylenol and Benadryl. I would recommend JNJ to anyone who wants growth and yield.
19. Cincinnati Financial (CINF) Dividend yield: Medium Sector: Financial Dividend: January
I never heard of Cincinnati Financial until I started researching dividend payers. CINF has increased its dividend for 60 years straight, and I am delighted I found this company. They are just a boring insurance company, that is, until dividend payday.
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20. CVS Health (CVS) Dividend yield: Medium Sector: Healthcare Dividend: February
CVS has performed well during the pandemic and beyond. I think we all see the value of having a local medical service location to conduct business. Growth is slow but still strong and a medium dividend—a great long-term medical play.
21. Starbucks (SBUX) Dividend yield: Low Sector: Consumer Discretionary Dividend: February
Who doesn’t love Starbucks? I think SBUX proved that everyone still wants to buy coffee, no matter the cost. I prefer McDonald’s coffee, but I will take an Iced Caramel Macchiato whenever I get a chance. They are still in the growth phase, so the dividend is low. Buy and hold for a long time.
22. Exxon (XOM) Dividend yield: High Sector: Energy Dividend: March
Everyone wants to get rid of oil and fossil fuels, but they are here for another 40-50 years (in my opinion). Exxon was beaten up badly during the pandemic and oil crisis in early 2020, but they have recovered nicely, along with oil prices. Man, those XOM paydays are enormous! Buy and hold, and you can use the dividends to buy into alternative energy plays.
23. Target (TGT) Dividend yield: Low Sector: Consumer Staples Dividend: March
Yes, I can hold Walmart and Target—they serve different consumers. Target has moved into clothing lines and the online space. I love walking into Target, and I think they have done an excellent job of diversifying away from Walmart. Maybe they are secretly working together? Target is still growing, so the dividend is low. Buy and hold for your grandkids.
24. Well Fargo (WFC) Dividend yield: Low Sector: Finance Dividend: March
The federal reserve pretty much made Wells Fargo cut their dividend during the pandemic, but I held and gained excellent capital appreciation. Hopefully, the dividend doubles soon. Everyone should own at least one of the four major banks (Wells Fargo, JP Morgan Chase, Bank of America, and Citibank). I use Wells Fargo brokerage, so I love the stock. Hopefully, we get back to the 3-4% dividend yields over the next five years.
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