It’s always a good time for investors to consider investing in blue-chip dividend stocks. In a sense, this class of equities is amongst the most established and stable investments possible.
Blue-chip companies are well-established, have solid reputations, and are backed by strong financials. They also have good records of performance over long periods. That alone is an excellent indicator of stability. Further, blue-chip stocks that pay dividends are remarkably stable in that dividends require overall financial strength.
So, let’s dive in and look at seven companies that have achieved Blue-chip status and continue to pay dividends.
McDonald’s (NYSE:MCD) represents extreme stability within fast food and stocks in general. Being extremely stable, unfortunately, sometimes gets conflated with being boring. Further, McDonald’s is highly ubiquitous, operating approximately 40,000 restaurants today. Those factors might lead investors to believe McDonald’s is bland and slow-growing. In turn, that could dissuade investment into its shares.
The truth is that McDonald’s isn’t slow-growing, and comparable sales increased by 14% in the most recent quarter, reaching $6.7 billion. Although McDonald’s sales growth is lower overall at 8.1% during the same period, it did increase from 6.1% growth during the same period a year earlier. You can go on and on talking about the merits of the company’s most recent earnings report, which would be perfectly valid to imply that McDonald’s is growing quickly.
Investors should also note that the company has its sites on growth. McDonald’s intends to increase its restaurant count from 40,000 today to 50,000 by 2027. Further, the company recently launched its CosMc’s brand offshoot. While some analysts believe the brand offshoot has little potential to upset leaders like Starbucks, only time will tell.
Broadcom (AVGO)
Source: Broadcom
Recent bullishness following the Federal Reserve’s Dec. 13 remarks pushed Broadcom (NASDAQ:AVGO) shares higher. While it would have been nice for investors to get in before that upward spike, there are still multiple reasons to invest in the stock.
The most important reason is that Broadcom is an excellent secular player in the semiconductor industry. The company provides semiconductor design software for which it has a strong sales base throughout the industry. In short, as the semiconductor industry continues to grow, so too will Broadcom.
One reason investors might be hesitant to purchase AVGO shares is that they’re both fully priced and perhaps overvalued. At the same time, it’s easy to refute that argument: Broadcom continues to have extraordinarily high profitability, and its P/E ratio is essentially middle of the road.
That will continue to cause some investors to hesitate, but the truth is that 2024 is looking much brighter. AI investment will continue to rise, which will continue to affect the semiconductor industry positively. It’s a strong indicator that Broadcom will continue to reward investors.
AbbVie (ABBV)
Brown glass pill bottle on its side showing white pills inside, with other pill bottles behind it representing MACK stock.
Source: shutterstock.com/Champhei
The narrative around AbbVie (NASDAQ:ABBV) stock is generally dominated by headlines that relate to Humira, its blockbuster drug. It’s no secret that Humira has passed its best days, With sales that fell more than 36% in the most recent quarter.
Perhaps those headlines should be more optimistic because there’s much to like about AbbVie and its shares. Humira accounted for $3.547 billion of sales, anchoring an immunology portfolio of drugs that provided $6.783 billion overall. Immunology accounts for roughly half of AbbVie’s overall sales at this point. This makes it one of those blue-chip dividend stocks to buy.
The positive, of course, is that it is growing very quickly, at more than 50%, quickly making up for Humira’s decline. That truth makes it easy to argue that the stock’s Assumed decline was overstated. Investors who follow that logic and invest will get a relatively high dividend above 4% or more.
AbbVie Continues to seek meaningful growth outside of Skyrizi and Rinvoq. The company recently announced acquisitions of Immunogen and Cerevel.
Mastercard (MA)
Personal saving rate vs. Credit card delinquency
Source: Chart by Josh Enomoto
The story surrounding Mastercard (NYSE:MA) and other credit card providers has been very compelling in 2023. Cash-strapped consumers have increasingly turned to credit cards to finance purchases, pushing credit card stocks higher.
While the scenario has pushed American credit card debt above $1 trillion, the outlook remains strong for providers. That strength was reflected in Mastercard’s earnings release in late October. Revenues were up 14%, and purchase volumes increased by 12%. The stock provides a dividend that is not particularly high, with a yield below 1%. However, there are still many strong signs that could easily substantiate a December purchase of the shares.
Investors should fully expect that Mastercard fundamentals will continue to improve through the holiday season. The National Retail Federation expected holiday sales to reach record levels this year per an early November report. A Gallup poll from early December suggests that this holiday season will be marked by the strongest spending since 1999.
Walmart (WMT)
WMT Stock
Walmart (NYSE:WMT), like just about every other stock, jumped higher on Dec. 13 following the Federal Reserve’s latest decision to hold rates steady. Shares immediately gave back those gains the following day, but Walmart remains a strong investment overall.
Walmart is pretty much excellent. It’s the world’s biggest retailer and grocery store in the United States. Of course, it stocks a massive supply of goods often sold at the cheapest prices. Therefore, it’s tough to see why Walmart should not continue to provide solid returns for investors. All in all, it’s one of those blue-chip dividend stocks to consider.
The company is well known for returning money to investors. In the most recent quarter the company returned $5.8 billion to investors and currently yields 1.5% through its dividend. Beyond that, Walmart continues strengthening its e-commerce footprint, which grew by 15% globally. As mentioned above, this holiday season is expected to be particularly strong, which should be reflected in Walmart’s earnings in the current quarter.
Altria (MO)
a pile of cigarettes
Source: Shutterstock
Altria (NYSE:MO) and other tobacco giants will continue to be intriguing investments throughout 2024. Stocks across the sector continue to provide high dividends meant to entice investment as the tobacco industry goes through big changes.
At Altria, that manifests as a dividend that pays roughly 9.2% at the moment. That will continue to be the primary reason investors place their money in Altria in 2024. The company continues developing smokeless tobacco products and other lower-harm alternatives to cigarettes. Meanwhile, cigarettes are going to continue to fund the overall transition.
Revenues fell by 2.5% through the first nine months of 2023. I’d argue that that’s not a very big concern at all. Altria’s shares have continued to show momentum over the past few weeks. That’s a strong sign. So too is the fact that Altria last reduced its dividend payment in 1970. Its payout ratio is still within the healthy range and should provide enough reason for investment. This makes it one of those blue-chip dividend stocks to buy.
UnitedHealth (UNH)
An image of two medical professionals performing a procedure on a patient
Source: Roman Zaiets / Shutterstock.com
UnitedHealth (NYSE:UNH) will continue to be one of the best blue chip dividend stocks to consider in the healthcare space. The company has grown rapidly in 2023, especially considering its size. In the third quarter, revenues increased by 14% to $92.4 billion.
Investors may be curious whether UnitedHealth stands to take a hit from the costs of popular weight loss drugs such as Ozempic and Wegovy. The truth is UnitedHealth has a firm grip across the entirety of the healthcare supply chain. It controls middleman and pharmacy benefit managers and I guess the company will figure out how to benefit from those blockbuster drugs. The company will continue to face scrutiny for its practices, but again, these large health insurers tend to win in America.
Americans may be incredibly frustrated with the state of health insurance these days and healthcare in general, but that doesn’t mean that United Health isn’t a strong investment.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.
