Conservative equity investors often lean toward blue-chip, dividend-paying stocks when deciding which investments to buy.
Blue chips are generally older, more stable and more dependable companies. They tend to have high and predictable revenue streams and a proven ability to consistently generate earnings over the long run. Investors in blue-chip stocks have a well-founded sense of security regardless of what the market may be doing at any given time.
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Because most blue chips are mature companies with ample sales and reliable profits, many of them regularly pay dividends to shareholders. Dividends are a form of passive income that contributes to the total return of the stocks that pay them.
Another benefit of regular dividends is that they can act as a hedge against inflation. This is especially true if dividends increase over time, which is the case for many blue-chip stocks.
It’s clear that blue-chip, dividend-paying stocks are a smart investment for conservative-leaning investors who have the dual objective of capital appreciation and current income.
Here is a list of five of the very best blue-chip dividend-paying stocks to buy today:
| Stock | Sector | Market Capitalization | Dividend Yield |
| 3M Co. (ticker: MMM) | Industrials | $58 billion | 2.7% |
| Altria Group Inc. (MO) | Consumer defensive | $85 billion | 8% |
| Western Union Co. (WU) | Financials | $4.2 billion | 7.5% |
| Coca-Cola Co. (KO) | Consumer defensive | $281 billion | 3% |
| JPMorgan Chase & Co. (JPM) | Financials | $608 billion | 2.2% |
3M Co. (MMM)
MMM started in business in 1902 as an industrial company providing decidedly low-tech products to business and industry. To this day, the company’s best-known product may be its iconic yellow Post-It notes. Today, however, 3M is a $58 billion diversified firm that has embraced technology both in its products and in its operations. It has become a leader in critical industries such as health care, digital electronics and transportation. Additionally, it’s making strong inroads in the emerging field of materials science.
Wall Street is predicting that 3M will generate $21.5 billion in revenue in 2024 and will grow that figure to $22.2 billion in 2025.
Sector: Industrials Yield: 2.7%
Altria Group Inc. (MO)
Tobacco and alcohol stocks aren’t for everyone. Some investors will be uncomfortable investing in these controversial industries. Still, from a purely financial standpoint, tobacco giant Altria Group is an out-and-out blue-chip stock paying a frothy dividend.
MO is an international company that is the corporate successor to Phillip Morris. It sells cigarettes, pipe tobacco, cigars, smokeless tobacco products, e-cigarettes and vaping products and equipment. The firm has loyal customers all over the world. On top of its tobacco business, MO is one of the largest shareholders in Anheuser-Busch InBev SA/NV (BUD), which is the largest beer brewer in the world.
There’s a tremendous global market for the products MO offers. The consensus revenue estimates out of Wall Street are calling for more than $18 billion in sales in 2024 and 2025 from this $85 billion firm.
Sector: Consumer defensive Yield: 8%
Western Union Co. (WU)
With a healthy current yield, a market cap of $4.2 billion and a history dating back to its founding in 1851, WU definitely qualifies as a blue-chip dividend-paying stock.
WU has two main business segments: the consumer money transfer business and the consumer financial services business.
The money transfer segment is well known around the world for making domestic and global money transfers for individuals who, for one reason or another, lack a traditional, modern banking relationship. Western Union was the first company to complete a wire transfer of funds when it accomplished the task via telegraph in 1872. Today, of course, Western Union uses high-tech digital technology to effect money transfers, but the vital service it provides is essentially the same as it was when it invented the business 152 years ago.
The consumer financial services part of its business involves selling money orders, offering prepaid debit cards and providing digital bill payment services to individuals.
In 2023 the company’s full-year revenue exceeded $4.3 billion. Analysts expect revenue to decrease a little in 2024 before increasing modestly in 2025 as the company works to compete with relatively new app-based money transfer systems like Venmo, which is owned by PayPal Holdings Inc. (PYPL). However, the company has a solid dividend history and is committed to continued income distributions.
Sector: Financials Yield: 7.5%
[READ: 7 No-Fee ETFs to Maximize Your Returns.]
Coca-Cola Co. (KO)
KO may be the best-known, most successful beverage company in the world, with a market capitalization of $281 billion. Analysts on Wall Street expect revenue of $41.7 billion in 2024 and $43.8 billion in 2025.
The company’s blue-chip dividend-paying status is cemented by its 138-year history of success and the fact that it has increased its dividend payout annually for 62 consecutive years, making it one of the few so-called Dividend Kings in the stock market that have raised dividends like clockwork for 50 years or more.
This Atlanta-based company manufactures and distributes nonalcoholic beverages around the world. Its hugely popular brands include Coke, Diet Coke, Minute Maid, Bodyarmor, Powerade, Fanta, Sprite and others too numerous to mention.
Investors have been a little disappointed in the stock price performance so far in 2024 but several Wall Street firms have confidence in the stock. JPMorgan, Barclays and Morgan Stanley all have an “overweight” rating on the company, and BofA Securities rates the stock “buy.”
Sector: Consumer defensive Yield: 3%
JPMorgan Chase & Co. (JPM)
As consumers and investors know, the U.S. economy is in the middle of a difficult economic and interest rate environment right now. Despite these challenges, JPM has performed admirably. While many banks have struggled, JPM has managed to thrive. In short, it’s provided a solid dividend and excellent capital appreciation over the last several years.
JPM is a sprawling banking institution that offers savings accounts, checking accounts, certificates of deposit and lending services to retail and commercial clients. JPMorgan also has huge investment banking, wealth management and credit card businesses. It has an extensive branch office network in the U.S. and its customers range from small depositors to some of the largest corporations on earth.
Revenue generation is key to paying a consistently high dividend to shareholders. It’s estimated that this $608 billion large-cap bank will take in $161 billion in revenue in 2024 and earn $16.58 in earnings per share. That’s more than enough to sustain the firm’s annual forward dividend of $4.60 a share.
But there is more good news for owners of JPM. On June 28 the company’s board of directors announced plans to increase its quarterly dividend to from $1.15 to $1.25 a share beginning in the third quarter of 2024. Once that dividend payout kicks in, the annual dividend will be $5 a share, 8.7% higher than the current dividend rate.
Sector: Financials Yield: 2.2%
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5 Best Blue-Chip Dividend Stocks to Buy Now originally appeared on usnews.com
Update 07/19/24: This story was previously published at an earlier date and has been updated with new information.
