With the bull market starting its fourth year, and yields on U.S. debt falling to the lowest levels since early this year, many growth and income investors have begun to look for alternative ideas to generate passive income. Quality blue-chip stocks with safe and secure yields can provide a substantial income stream and offer significant total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. At 24/7 Wall St., we consistently emphasize the potential of total return to our readers. It is one of the most effective ways to enhance the prospects of overall investing success.
Blue-chip stocks are shares of large, well-established, financially stable companies with a consistent and reliable performance history. They are often considered less risky and are a popular choice for long-term investors. Additionally, nearly all leaders in the category pay dependable, recurring dividends each quarter, regardless of the state of the economy. The term “blue chip” originates from the game of poker, where a blue chip is the highest-value chip.
We constantly screen our 24/7 Wall passive income stock research database for the best ideas. Five stocks that most investors are very familiar with are ideal choices for growth and income investors seeking reliable dividend passive income, along with some growth potential to keep pace with inflation. All are rated Buy at the top Wall Street firms we cover, and all pay at least a 5% dividend.
Why do we cover Blue-chip dividend stocks?
Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciation has contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations. A study by Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the 50 years from 1973 to 2023. Over the same timeline, this was more than double the annualized return for non-payers (3.95%).
Altria
Altria is one of the world’s largest producers and marketers of tobacco, cigarettes, and related products. This tobacco company offers value investors a compelling entry point and a generous 6.21% dividend yield. Altria Group Inc. (NYSE: MO) manufactures and sells smokable and oral tobacco products in the United States through its subsidiaries.
The company provides cigarettes primarily under the Marlboro brand.
- Cigars and pipe tobacco, principally under the Black & Mild and Middleton brands
- Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
- on! Oral nicotine pouches
- e-vapor products under the NJOY ACE brand.
It sells its tobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.
Altria used to own over 10% of Anheuser-Busch InBev (NYSE: BUD), the world’s largest brewer. Earlier this year, the company sold 35 million of its 197 million shares through a global secondary offering. That represents 18% of its holdings but still leaves 8% of the outstanding shares in its back pocket. Altria also announced a $2.4 billion stock repurchase plan partially funded by the sale.
Stifel has a Buy rating with a $63 target price.
Bristol-Myers Squibb
Bristol Myers Squibb is a global biopharmaceutical company committed to discovering, developing, and delivering innovative medicines. This top company remains a solid pharmaceutical stock to own long-term, offering an outstanding entry point and a 5.65% dividend. Bristol-Myers Squibb Company (NYSE: BMY) discovers, develops, licenses, manufactures, and markets pharmaceutical products worldwide.
The company offers products in:
- Hematology
- Oncology
- Cardiovascular
- Immunology therapeutic classes
Bristol-Myers Squibb 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
Truist Financial has a Buy rating on the shares with a $65 target.
Brookfield Renewable Partners L.P.
This off-the-radar utility stock is an ideal choice now for growth and income investors, as well as those concerned with environmental issues. Brookfield Renewable Partners L.P. (NYSE: BEP) operates publicly traded platforms for renewable power and decarbonization solutions. Investors are paid a rich 5.68% dividend.
The Company’s renewable power portfolio includes:
- Hydroelectric
- Wind,
- Utility-scale solar
- Distributed generation
- Storage facilities are located across North America, South America, Europe, and the Asia-Pacific region.
Its operations are divided into six segments:
- Hydroelectric, which is further categorized by geography (North America, Colombia, and Brazil)
- Wind
- Utility-scale solar
- Distributed energy and storage, including distributed generation
- Pumped storage
- Battery energy storage systems; sustainable solutions, encompassing agricultural renewable natural gas, carbon capture and storage, recycling, cogeneration, biomass, nuclear services, electrofuels, and power transformation
- Corporate
The Company’s total power portfolio comprises approximately 46,200 megawatts of installed capacity and a development pipeline of approximately 200,000 megawatts.
CIBC has an Outperform rating with a $31 target price.
Prudential Financial
Prudential Financial offers a range of insurance, investment management, and other financial products and services. With a solid 5.11% dividend, this insurance and investment giant is a safe investment option for conservative investors. Prudential Financial, Inc. (NYSE: PRU), together with its subsidiaries, provides insurance, investment management, and other financial products and services in the United States and internationally.
It operates through five segments:
- PGIM
- Retirement Strategies
- Group Insurance
- Individual Life
- International Business segments
The PGIM segment offers investment management services and solutions related to public fixed income, public equity, real estate debt and equity, private credit, and other alternatives. It also provides multi-asset class strategies to institutional and retail clients, as well as its general account.
The Retirement Strategies segment provides a range of retirement investment and income products and services to retirement plan sponsors in the public, private, and not-for-profit sectors. It develops and distributes individual variable and fixed annuity products.
The Group Insurance segment offers:
- Various group life plans
- Long-term and short-term group disability
- Group corporate, bank, and trust-owned life insurance in the United States, primarily for institutional clients, for use in connection with employee and membership benefits plans
- Accidental death and dismemberment, and other supplemental health solutions
- Plan administration services in connection with its insurance coverages
The Individual Life segment develops and distributes variable life, universal life, and term life insurance products.
The International Businesses segment develops and distributes life insurance, retirement products, investment products, specific accident and health products, and advisory services. The company provides its products and services to individual and institutional customers through its proprietary and third-party distribution networks.
Jefferies has a Buy rating with a $134 target.
Verizon
Verizon Communications Inc., commonly known as Verizon, is an American multinational telecommunications conglomerate that still offers tremendous value, trading at 8.25 times the estimated 2026 earnings with a 6.55% dividend. Verizon Communications, Inc. (NYSE: VZ), through its subsidiaries, provides a range of communications, technology, information, and entertainment products and services to consumers, businesses, and government entities worldwide.
It operates in two segments:
- Verizon Consumer Group
- Verizon Business Group
The Consumer segment provides wireless services across the United States through Verizon and TracFone networks, as well as through wholesale and other arrangements.
It also provides fixed wireless access (FWA) broadband through its wireless networks and related equipment and devices, such as:
- Smartphones
- Tablets
- Smartwatches and other wireless-enabled connected devices
The segment also offers wireline services in the Mid-Atlantic, Northeastern United States, and Washington, D.C., through its fiber-optic network, Verizon Fios product portfolio, and copper-based network.
The Business segment provides wireless and wireline communications services and products, including:
- FWA broadband
- Data
- Video and conferencing
- Corporate networking
- Security and managed network
- Local and long-distance voice
Network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally.
Goldman Sachs has given the company a “Buy” rating and a price target of $49.
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