Investing

S&P 500 Dividend Yield Lowest in 20 Years: 5 Blue Chips to Buy Now With Huge Dividends

Time and time again, the Wall Street pundits say interest rates are going higher, and time and time again they plunge lower. Last week the benchmark 10-year Treasury bond yield hit the lowest level since February, and the S&P 500 yield currently is at its lowest in 20 years a paltry 1.35%. So what are investors that need income and look to equities to do? One idea is to search for quality companies that pay regular and dependable dividends.

We screened our 24/7 Wall St. research universe looking for safe blue chip companies that pay big dividends and still have solid growth prospects for the rest of 2021 and beyond. All five are rated Buy at top Wall Street firms, but it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

AbbVie

This is one of the top pharmaceutical stock picks across Wall Street, and 34% of fund managers own the shares. AbbVie Inc. (NYSE: ABBV) is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. The company develops and markets drugs in areas such as immunology, virology, renal disease, dyslipidemia and neuroscience.

One of the biggest concerns with AbbVie is what might happen eventually with anti-inflammatory therapy Humira, which has some of the largest sales for a drug ever recorded. The company was concerned, so in June of 2019 it announced that it has agreed to pay $63 billion for rival drugmaker Allergan, the latest merger in an industry in which some of the biggest companies have been willing to pay a high price to resolve questions about their future growth. The purchase officially closed in May of last year.

AbbVie may be nearing the limits of how far it can boost Humira’s price as cheaper competitors come to market, a problem Allergan is already grappling with as more alternatives to Botox emerge.

Shareholders receive a 4.41% dividend. SVB Leerink has a street-high price target of $144, and the Wall Street consensus target is just $124.08. AbbVie stock closed trading on Monday at $117.79.