One of the big challenges dividend stock investors face is balancing the need for big-time dividends with the desire for consistent results. After all, a lot of seemingly generous companies that have some of the biggest yields in today’s market may not be so generous in the future. Worse, they could see their share price cut significantly in times of trouble so those payouts don’t offset your investment losses.
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A possible solution, then, is to seek out high-quality blue-chip dividend stocks that offer both the scale necessary to stick around as well as the solid balance sheets to support reliable dividend payments for many years to come.
The following picks are all blue-chip dividend stocks with above-average yields and well-established market positions:
| Blue-chip stock | Market capitalization | Trailing dividend yield |
| Altria Group Inc. (ticker: MO) | $74.6 billion | 9% |
| Cisco Systems Inc. (CSCO) | $217.6 billion | 2.9% |
| Enterprise Product Partners LP (EPD) | $59.5 billion | 7.1% |
| General Mills Inc. (GIS) | $37.2 billion | 3.5% |
| Johnson & Johnson (JNJ) | $377.5 billion | 2.9% |
| JPMorgan Chase & Co. (JPM) | $431.2 billion | 2.7% |
| Lockheed Martin Corp. (LMT) | $103.6 billion | 2.9% |
| Target Corp. (TGT) | $50.2 billion | 3.9% |
| United Parcel Service Inc. (UPS) | $131.7 billion | 4.1% |
Altria Group Inc. (MO)
Market capitalization: $74.6 billion Trailing dividend yield: 9%
Sector: Consumer staples
Recently featured as one of the nine highest S&P 500 dividend stocks, Altria is down slightly in what has otherwise been a pretty strong year for other large companies. But in many ways, that’s because this is a slow-and-steady stock to hold for the long run — which makes it unappealing to the swing traders and short-term tactics of many on Wall Street. The tobacco giant behind Marlboro cigarettes, Black & Mild pipe and cigar products, and smokeless tobacco like Copenhagen and Skoal is admittedly not a growth stock given its business specialty. But its appeal lies in the fact it dominates the U.S. market and provides an amazing 54 consecutive years of dividend increases. That long-term commitment to shareholders and long-term staying power make MO a blue-chip dividend stock worth pursuing.
Cisco Systems Inc. (CSCO)
Market capitalization: $217.6 billion Trailing dividend yield: 2.9% Sector: Technology
While there are other well-respected tech stocks out there, many of the trillion-dollar names that first come to mind in the sector don’t pay more than nominal dividends. Enterprise technology player Cisco may not be as flashy as these more recognizable consumer-focused brands, but it is certainly more generous when it comes to dividends. Specifically, the current payout of 39 cents quarterly is more than double the 17 cents it paid as of 2013. That’s a tremendous 10-year track record, and should provide a vote of confidence to long-term investors going forward. Besides, the future is looking bright, particularly after a recent big-ticket acquisition of cybersecurity and big data player Splunk Inc. (SPLK). This already-dominant technology solutions provider has the scale and expertise to ensure that income stream remains intact for a long time to come.
Enterprise Product Partners LP (EPD)
Market capitalization: $59.5 billion Trailing dividend yield: 7.1% Sector: Energy
Though not the first energy company you’d think of if you’re making a list of blue-chip stocks in the sector, EPD is nevertheless one of the most promising long-term dividend stocks in the industry. That’s in part because of its generous yield, which is more than four times the payout of the S&P 500 at present. It’s also because of EPD’s underlying business model. This stock provides “midstream” energy services, which largely includes pipeline services that transport crude oil, petrochemicals and natural gas. Many stocks performed better than EPD in recent years as they rode the ups and downs of oil prices, but smaller explorers can be incredibly volatile — and incredibly risky if energy prices fall from their current levels. On the other hand, the infrastructure of Enterprise Product Partners will always be put to good use. As a result, the stock has logged more than 20 years of consecutive dividend increases across all manner of market environments to prove that it is a blue-chip stock worth considering for the long haul.
General Mills Inc. (GIS)
Market capitalization: $37.2 billion Trailing dividend yield: 3.5% Sector: Consumer staples
When it comes to consumer brands, General Mills has one of the most powerful portfolios in grocery stores with its line of cereals like Cheerios and Cinnamon Toast Crunch, Betty Crocker and Pillsbury baked goods, and Annie’s organic foods products. Inflation has been a bit of a bugbear lately, but GIS has managed to move up its prices to mitigate those impacts thanks to strong customer loyalty. But longer term, one of the biggest drivers of investor interest is the consistent dividends of this blue-chip stock. The company just bumped its dividend up by a nickel to 59 cents quarterly, a more than 9% increase, but those dividends are still only about 50% of total projected earnings. That means even bigger payouts could be on the way in the years ahead. And with rock-solid brands under its belt, it’s unlikely the underlying business is going to change enough to disrupt this strong outlook in the foreseeable future.
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Johnson & Johnson (JNJ)
Market capitalization: $377.5 billion Trailing dividend yield: 2.9% Sector: Health care
The bluest of blue-chip stocks, Johnson & Johnson is sometimes referred to a “widow and orphan” investment, as it is so solid that it can provide for your family in the off chance something terrible happens. It’s morbid, sure, but not an exaggeration of J&J’s staying power given its nearly 140 years of operations and tip-top credit rating of AAA (which is better than even the U.S. government after recent downgrades prompted by the debt ceiling). Johnson and Johnson is a health care company, which gives it a strong tailwind thanks to aging global demographics and persistent inflationary pressures on medical spending, but within this sector it has a very diversified operation. That includes business lines like medical devices, prescription drugs and vaccines, among others. If you want a solid and respected dividend stock that is sure to cash in on future health spending, JNJ is the way to go.
JPMorgan Chase & Co. (JPM)
Market capitalization: $431.2 billion Trailing dividend yield: 2.7% Sector: Financials
Not to be outdone by the prior health care company, JPMorgan has even deeper roots that stretch back to 1799. And like J&J, it is not resting on its laurels but still growing and dominating as it remains the largest U.S. bank by assets and continues to prove it’s the best-run enterprise in the entire sector. Case in point: Back at the end of July, JPM topped analyst estimates handily — including a 67% surge in profits to a new all-time high — thanks to its fire-sale purchase of First Republic. This megabank has a history of shrewd deals like that, including the purchase of then-toxic Bear Stearns during the financial crisis roughly 15 years ago. By making bold but profitable deals, JPM has been able to provide consistent performance — and constant dividends to its shareholders over the years.
Lockheed Martin Corp. (LMT)
Market capitalization: $103.6 billion Trailing dividend yield: 2.9% Sector: Industrials
To be upfront about it, LMT doesn’t make the cut for many investors simply because it is in the business of weapons and war. But if you’re concerned about the profitability of the defense industry and less concerned about the moral quandaries it poses, then LMT is a blue-chip dividend stock worth a look. It is one of the most familiar and dominant names in the space, cranking out iconic war machines such as the F-117 stealth fighter, the F-16 Fighting Falcon and the massive C-130 Hercules military transport plane. And amid the recent government shutdown shenanigans, it’s worth noting that the Department of Defense is not included in so called “discretionary” spending, so there’s little risk of Uncle Sam pulling the plug on long-term contracts with LMT. With a dividend of $3 per quarter — three times the $1 per share paid a decade ago — this is a stock that has a strong commitment to providing income to stockholders.
Target Corp. (TGT)
Market capitalization: $50.2 billion Trailing dividend yield: 3.9% Sector: Consumer discretionary
The past few years haven’t been great for Target, as the leading U.S. retailer is actually trading a bit below its pre-pandemic levels right now after a recent fall from grace. That was driven largely by short-term headwinds and fears of an inflation-stoked recession, but with more than 2,000 stores and rich history that dates back more than 100 years, it’s hard to bet against this stock in the long term. More importantly for dividend investors, this blue-chip big box store has been paying dividends to shareholders ever since its 1967 IPO — and, more recently, it has increased those payouts from 36 cents quarterly back in 2013 to $1.10 as of its expected November payout. That’s more than triple the dividends a decade later, and a great sign for buy-and-hold investors.
United Parcel Service Inc. (UPS)
Market capitalization: $131.7 billion Trailing dividend yield: 4.1% Sector: Industrials
Roughly twice the size of rival logistics company FedEx Corp. (FDX), UPS is nevertheless a $130 billion package delivery powerhouse that has become a necessity in the age of e-commerce and on-demand shipping. And while it’s hard to imagine UPS growing significantly from its already worldwide footprint, the long-term trend of rising volume in packages overall is a good thing for this leading shipper. What’s more, current payouts of $1.62 per quarter represent just 60% or so of next year’s projected earnings, so the dividend is very stable — and longer term, those payouts are up 160% in the past 10 years, from just 62 cents in 2013. With an entrenched brand and a wide moat that makes it difficult for new entrants into the global logistics game, UPS is a solid blue-chip dividend stock for any portfolio.
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Update 09/28/23: This story was previously published at an earlier date and has been updated with new information.
