Investing

7 Old-School Blue-Chip Dividend Stocks Offer Total Return Magic

Lee Jackson

Published: April 12, 2024 9:53 am

Investors love dividend stocks because they provide dependable income and a great opportunity for solid total return. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or portfolio consists of income and stock appreciation.

For example, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13%. That is, 10% for the increase in stock price and 3% for the dividends paid.

While we focus on dividend stocks, as many of our readers are looking for passive income ideas, we also want to cover stocks that offer solid total return and passive income potential. Passive income is a steady stream of unearned income that doesn’t require active traditional work. Shared ideas for earning passive income include investments, real estate, or side hustles.

We screened our 24/7 Wall St. blue-chip dividend stock research database, looking for old-school dividend leaders who offer a significant degree of safety and dependable dividends. Six companies made the cut; two are top pharmaceutical stocks that look dirt cheap now. All are Buy-rated by top Wall Street firms. 

AT&T

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The legacy telecommunications company has been going through a lengthy restructuring while lowering the dividend, which still stands at a rich 6.37%. AT&T, Inc. (NYSE: T) provides worldwide telecommunications, media, and technology services.

Its Communications segment offers wireless voice and data communications services.

AT&T  sells through its company-owned stores, agents, and third-party retail stores:

• Handsets
• Wireless data cards
• Wireless computing devices
• Carrying cases
• Hands-free devices 

AT&T also provides:

• Data
• Voice
• Security
• Cloud solutions
• Outsourcing
• Managed and professional services
• Customer premises equipment for multinational corporations, small and mid-sized businesses, and governmental and wholesale customers. 

In addition, this segment offers residential customers broadband fiber and legacy telephony voice communication services.

It markets its communications services and products under :

• AT&T
• Cricket
• AT&T PREPAID
• AT&T Fiber 

The company’s Latin America segment provides wireless services in Mexico and video services in Latin America. This segment markets its services and products under the AT&T and Unefon brands.

Bristol-Myers Squibb

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This top company remains a solid pharmaceutical stock to own long-term, offering an outstanding entry point and a solid 4.68% dividend. Bristol-Myers Squibb Company (NYSE: BMY) discovers, develops, licenses, manufactures, and markets pharmaceutical products worldwide.

The company offers products in hematology, oncology, cardiovascular, and immunology therapeutic classes.

The company’s products include:

• Revlimid, an oral immunomodulatory drug for the treatment of multiple myeloma
• Opdivo for anti-cancer indications
• Eliquis, an oral inhibitor indicated for the reduction in risk of stroke/systemic embolism in NVAF and for the treatment of DVT/PE
• Orencia for adult patients with active RA and psoriatic arthritis, as well as reducing signs and symptoms in pediatric patients with active polyarticular juvenile idiopathic arthritis

The company also provides:

• Sprycel for the treatment of Philadelphia chromosome-positive chronic myeloid leukemia
• Yervoy for the treatment of patients with unresectable or metastatic melanoma
• Abraxane, a protein-bound chemotherapy product
• Implicit for the treatment of multiple myeloma
• Reblozyl for the treatment of anemia in adult patients with beta-thalassemia

Comerica

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Based in Dallas, this fast-growing banking center giant pays a substantial 5.40% dividend. Comerica, Inc. (NYSE: CMA) provides various financial products and services.

The company operates through:

• Commercial banking
• Retail banking
• Wealth management
• Finance segments

The Commercial Bank segment offers:

• Commercial loans and lines of credit
• Deposits
• Cash management
• Capital market products
• International trade finance
• Letters of credit
• Foreign exchange management services
• Loan syndication services
• Payment and card services for small and middle-market businesses, multinational corporations, and governmental entities

The Retail Bank segment provides:

• Personal financial services, such as consumer lending
• Consumer deposit gathering
• Mortgage loan origination and various
• Consumer products that include deposit accounts, installment loans, credit cards, student loans, home equity lines of credit
• Residential mortgage loans and commercial products and services to micro-businesses.

The Wealth Management segment offers products and services comprising:

• Fiduciary
• Private banking
• Retirement
• Investment management and advisory
• Investment banking and brokerage services
• Annuity products and life, disability, and long-term care insurance products

The Finance segment engages in the securities portfolio and asset and liability management activities.

Comerica operates in:

• Texas
• California
• Michigan
• Arizona
• Florida
• Canada
• Mexico

Dominion Energy

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Many of the Wall Street firms we cover are still very positive on utilities, and this company pays a strong 5.50% dividend.

Dominion Energy, Inc. (NYSE: D) operates through four segments:

• Dominion Energy Virginia,
• Gas Distribution, 
• Dominion Energy South Carolina, and
• Contracted Assets. 

The Dominion Energy Virginia segment generates, transmits, and distributes regulated electricity to residential, commercial, industrial, and governmental customers in Virginia and North Carolina.

The Gas Distribution segment engages in

• Regulated natural gas gathering
• Transportation
• Distribution and sales activities 
• Distributes nonregulated renewable natural gas

This segment serves residential, commercial, and industrial customers.

The Dominion Energy South Carolina segment:

• Generates
• Transmits
• Distributes electricity and natural gas to residential, commercial, and industrial customers in South Carolina. 

The company’s portfolio of assets included approximately:

• 30.2 gigawatts of electric generating capacity
• 10,500 miles of electric transmission lines
• 85,600 miles of electric distribution lines
• 94,200 miles of gas distribution lines
• Dominion serves approximately 7 million customers. 

ONEOK

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Solid natural gas pricing over the next year could help lift this top energy company, which pays a 4.97% dividend. ONEOK, Inc. (NYSE: OKE) gathers, processes, fractionates, stores, transports, and markets natural gas and natural gas liquids (NGL) in the United States.

It operates through four segments:

• Natural Gas Gathering and Processing
• Natural Gas Liquids (NGL)
• Natural Gas Pipelines
• Refined Products and Crude

The company owns natural gas gathering pipelines and processing plants in the Mid-Continent and Rocky Mountain regions; it also provides midstream services to producers of NGLs.

It also owns NGL gathering and distribution pipelines in:

• Oklahoma
• Kansas
• Texas
• New Mexico
• Montana
• North Dakota
• Wyoming
• Colorado

ONEOK also owns terminal and storage facilities in Kansas, Nebraska, Iowa, and Illinois; NGL distribution pipelines in Kansas, Nebraska, Iowa, Illinois, and Indiana; transports refined petroleum products, including unleaded gasoline and diesel; and owns and operates truck- and rail-loading, and -unloading facilities connected to NGL fractionation, storage, and pipeline assets.

In addition, the company transports and stores natural gas through regulated interstate and intrastate transmission pipelines and storage facilities.

Further, it owns and operates a parking garage in downtown Tulsa, Oklahoma, and leases excess office space and rail cars. The company also transports, stores, and distributes refined products, NGLs, and crude oil and conducts commodity-related activities, including liquids blending and marketing.

It serves integrated and independent:

• Exploration and production companies
• NGL and natural gas gathering and processing companies
• Crude oil and natural gas production companies
• Utilities
• Industrial companies
• Natural gasoline distributors
• Propane distributors
• Municipalities
• Ethanol producers
• Petrochemical, refining, and marketing companies
• Heating fuel users, refineries, and exporters

Pfizer

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This top pharmaceutical stock was a massive winner in the COVID-19 vaccine sweepstakes but has been crushed as many are not getting boosters. Pfizer Inc. (NYSE: PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide and pays a hefty 6.30% dividend, which has risen yearly for the last 14 years.

The company offers medicines and vaccines in various therapeutic areas, including:

• Cardiovascular metabolic and women’s health under the Premarin family and Eliquis brands
• Biologics, small molecules, immunotherapies, and biosimilars under the Ibrance, Xtandi, Sutent, Inlyta, Retacrit, Lorbrena, and Braftovi brands
• Sterile injectable and anti-infective medicines and oral COVID-19 treatment under the Sulperazon, Medrol, Zavicefta, Zithromax, Vfend, Panzyga, and Paxlovid brands.

Pfizer also provides medicines and vaccines in various therapeutic areas, such as:

• Pneumococcal disease, meningococcal disease, tick-borne encephalitis
• COVID-19 under the Comirnaty/BNT162b2, Nimenrix, FSME/IMMUN-TicoVac, Trumenba, and the Prevnar family brands
• Biosimilars for chronic immune and inflammatory diseases under the Xeljanz, Enbrel, Inflectra, Eucrisa/Staquis, and Cibinqo brands
• Amyloidosis, hemophilia, and endocrine diseases under the Vyndaqel/Vyndamax, BeneFIX, and Genotropin brands

Philip Morris International

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This company has continued to grow its global market share and pays a fat 5.64% divided. Philip Morris International Inc. (NYSE: PM) is one of the largest international cigarette producers, with a share of 28% of the global cigarette/heated tobacco market.

Key combustible brands include:

• Marlboro
• Parliament
• L&M

The company is commercializing IQOS, a heat-not-burn product, in over 40 markets, which could drive earnings in the future. Most on Wall Street believe Philip Morris International offers superior underlying growth prospects, both near-term and long-term.

The share price has been weak lately as investors have questioned the growth potential of its reduced-risk products. All sales are outside the United States.