Investing

5 Blue Chip Dividend Stocks to Buy and Hold Forever

Coca-Cola

This company remains a top Warren Buffet holding and offers not only safety, but an incredible strong worldwide brand. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands. Aside for its namesake brand, its portfolio features 20 billion-dollar brands, including Diet Coke, Fanta, Sprite, vitaminwater, Powerade and Minute Maid.

Globally, the company is the top provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks. Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy its beverages at a rate of more than 1.9 billion servings a day.

The strong U.S. dollar could continue to be a headwind to the international business, but the company has expanded the product line, and it posted fourth-quarter earnings that the Merrill Lynch team was very encouraged by.

Investors receive a 3.25% dividend. The $48 Merrill Lynch price target is higher than the consensus figure of $46.36. The stock closed Friday at $43.14.

Entergy

This higher yielding integrated energy company was recently upgraded at Merrill Lynch. Entergy Corp. (NYSE: ETR) is engaged primarily in electric power production and retail distribution operations. It owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, including nearly 10,000 megawatts of nuclear power, making it one of the nation’s leading nuclear generators. Entergy delivers electricity to 2.8 million utility customers in Arkansas, Louisiana, Mississippi and Texas, and it has annual revenues of more than $12 billion.

Many analysts like the position of the company’s plants, as they supply some of the petrochemical industry along the Gulf Coast. Petrochemical plants and liquefied natural gas export facilities are springing up all across the region. For the petrochemical industry, the boom is driven by demand, not supply, and so the current lower gas prices actually help this growth trend, which has been a solid revenue silo for Entergy.

The company posted very solid earnings recently, and the guidance for the rest of the year was very good, despite some concerns over industrial sales. With a higher dividend than many of its peers, the company can be bought and put away for the long haul.

Entergy investors receive a 4.74% dividend. The Merrill Lynch price target is $78. The consensus target is $74.53 and the stock closed Friday at $71.74.

Procter & Gamble

This stock is still trading lower than this time last year, partly because it has a very large 65% of sales directed to foreign customers, which should improve as the dollar’s run looks to be slowing down. Procter & Gamble Co. (NYSE: PG) is a solid consumer staples stock especially for conservative investors to consider. The company sells lots of run-of-the-mill household items that are essential for everyday life, and it is not content to stand on its laurels.

The company is innovative in its product development process and uses that to help ensure future growth and cash flow. This should provide investors years of steady growth and dividends. While currency headwinds have weighed on recent earnings and projections, the dollar may be topping out this fall, and that would bode well for the future.

The company posted very solid fourth-quarter results in January, and despite earning expectations that have been lowered somewhat, Merrill Lynch feels comfortable that the stock can continue the current positive momentum.

Shareholders receive a 3.27% dividend. Merrill Lynch has as $85 price target, while the consensus target is $83.10. Shares closed Friday at $81.10.


For worried investors that need an income stream, all these top stocks make good sense for growth and income portfolios. The total return potential is solid, and the downside risk is far less than momentum stocks. Plus, add in the still somewhat oversold status of the market, and the upside could be stellar for patient investors.