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In this article, we will discuss 14 best blue chip dividend stocks to buy. You can skip our detailed analysis of dividend investments and their performance over the years, and go directly to read 5 Best Blue Chip Dividend Stocks to Buy.
The sharp decline in the stock market has investors and economists worried about the risks of a possible recession. According to the latest survey conducted by Wall Street Journal, 63% of economists see the probability of a recession in the next 12 months, up from 49% in July’s survey. The report also mentioned that the last time a recession probability crossed 50% was in July 2020.
In times of economic clampdown, analysts recommend loading up on blue-chip companies as they are leaders in the respective sectors. Moreover, these companies have excellent cash flows to their name, generating stable income for shareholders. Their strong balance sheets and sound financials make them secure investments during inflationary periods. This year’s returns also exhibited a remarkable performance of the blue chip companies relative to the rest of the market. The Dow Jones Industrial Average, an index that tracks the performance of 30 prominent blue chip companies, is down 7.96% this year, compared with a 17.7% drop in the S&P 500, as of the close of November 20.
When it comes to blue-chip companies, investors often gravitate toward these securities because of their solid dividend policies. Companies like Exxon Mobil Corporation (NYSE:XOM), PepsiCo, Inc. (NASDAQ:PEP), and The Procter & Gamble Company (NYSE:PG) not only have solid financials but have also raised their dividends for decades. In addition to this, dividend stocks have outplayed their peers during previous periods of market turmoil. According to a report by Lord Abbett, dividends on average contributed 76% of the total return of the S&P 500 in each decade when annualized returns were less than 10% since 1929. In light of these arguments, we will discuss the best blue chip dividend stocks to buy.
Photo by Dan Dennis on Unsplash
Our Methodology:
The stocks mentioned below are blue-chip companies with long histories of sound financial performance. We analyzed these stocks through their balance sheets, financial health, and dividend policies. The stocks are ranked according to their dividend yield, as of November 21.
Best Blue Chip Dividend Stocks to Buy
14. Mastercard Incorporated (NYSE:MA)
Dividend Yield as of November 21: 0.58%
Mastercard Incorporated (NYSE:MA) is an American multinational financial services company that provides a wide range of related services to its consumers. In November, Mizuho maintained a Buy rating on the stock with a $380 price target, following the company's solid performance in its recent quarterly earnings.
In the third quarter of 2022, Mastercard Incorporated (NYSE:MA) reported revenue of $5.8 billion, up 15.5% from the same period last year. The company's shareholder returns remained strong during the quarter as it repurchased shares worth over $1.6 billion. Moreover, it paid $474 million to shareholders in dividends, which makes it one of the best dividend stocks to buy now.
Mastercard Incorporated (NYSE:MA) has been raising its dividends consistently for the past eight years. It currently pays a quarterly dividend of $0.49 per share and has a dividend yield of 0.58%, as of November 21. In addition to Exxon Mobil Corporation (NYSE:XOM), PepsiCo, Inc. (NASDAQ:PEP), and The Procter & Gamble Company (NYSE:PG), MA is another prominent dividend stock to consider in the current market.
Mastercard Incorporated (NYSE:MA) saw a spike in hedge fund positions in Q3 2022, as 146 elite money managers tracked by Insider Monkey had stakes in the company, up from 137 in the previous quarter. These stakes have a total value of over $13.8 billion. Akre Capital Management was the company's leading stakeholder in Q3.
Baron Funds mentioned Mastercard Incorporated (NYSE:MA) in its Q3 2022 investor letter. Here is what the firm has to say:
“Shares of global payment network Mastercard Incorporated (NYSE:MA) fell despite reporting financial results that exceeded Street estimates. Revenue grew 21% and EPS grew 32% in the most recent reported quarter, and strong payment activity has persisted despite high inflation. Share price weakness represented a reversal of outperformance earlier this year and was likely driven by adverse foreign exchange movements and concerns about a potential weakening of consumer spending. We retain conviction due to Mastercard’s long runway for growth and significant competitive advantages.”
13. Apple Inc. (NASDAQ:AAPL)
Dividend Yield as of November 21: 0.62%
An American multinational tech giant, Apple Inc. (NASDAQ:AAPL) is another best dividend stock on our list. The company has raised its dividends consistently for the past nine years. Currently, it offers a per-share dividend of $0.23 every quarter, with a dividend yield of 0.62%, as of November 21.
In the third quarter of 2022, Apple Inc. (NASDAQ:AAPL) reported an operating cash flow of $23 billion and it generated $20.7 billion in free cash flow. The company's cash flow was sufficient as it returned nearly $20 billion in dividends to shareholders during the quarter.
Evercore ISI raised its price target on Apple Inc. (NASDAQ:AAPL) to $190 in November with an Outperform rating on the shares. The firm expects strong iPhone 14 revenues due to the company's consistent customer base.
Apple Inc. (NASDAQ:AAPL) was a popular buy among elite funds in Q3 2022, as 140 hedge funds owned stakes in the company, up from 128 in the previous quarter, according to Insider Monkey's data. The collective value of these stakes is over $144 billion. Warren Buffett's Berkshire Hathaway owned the largest stake in the company in Q3.
Wedgewood Partners mentioned Apple Inc. (NASDAQ:AAPL) in its Q3 2022 investor letter. Here is what the firm has to say:
“Apple Inc. (NASDAQ:AAPL) grew revenues +5% (foreign exchange adjusted and excluding Russia) driven by record iPhone revenues that were up about +3% on an exceptional year ago comparison of +50%. Apple’s installed base is over 1.8 billion devices which helps drive a software and services business that has generated almost $80 billion of revenue over the past 4 quarters. As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially ICs) as well as software, continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.”
12. Nordson Corporation (NASDAQ:NDSN)
Dividend Yield as of November 21: 1.12%
Nordson Corporation (NASDAQ:NDSN) is an Ohio-based multinational company that designs equipment for consumer and industrial adhesives, coatings, and sealants. In August, Baird raised its price target on the stock to $271 with an Outperform rating on the shares, highlighting the strong underlying demand for the company's products.
Nordson Corporation (NASDAQ:NDSN) currently pays a quarterly dividend of $0.65 per share. In 2022, the company extended its dividend growth streak to 59 years, which makes it one of the best dividend stocks on our list. As of November 21, the stock has a dividend yield of 1.12%.
In fiscal Q3 2022, Nordson Corporation (NASDAQ:NDSN) reported revenue of $662 million, which showed a 2.4% growth from the same period last year. At the end of the quarter, the company had over $128.7 million available in cash and cash equivalents and its total current assets amounted to over $1.1 billion.
As of the end of the September quarter, 26 hedge funds tracked by Insider Monkey owned stakes in Nordson Corporation (NASDAQ:NDSN), up from 23 in the preceding quarter. These stakes have a total value of over $146.8 million.
11. Microsoft Corporation (NASDAQ:MSFT)
Dividend Yield as of November 21: 1.12%
Microsoft Corporation (NASDAQ:MSFT) is one of the leading tech companies in the world. On September 20, the company declared a 20% hike in its quarterly dividend to $0.68 per share. This marked the company's 16th consecutive year of dividend growth, coming through as one of the best dividend stocks on our list. The stock's dividend yield came in at 1.12% on November 21.
In fiscal Q1 2023, Microsoft Corporation (NASDAQ:MSFT) reported revenue of $50 billion, which showed a 10.6% growth from the same period last year and also beat Street estimates by $410 million. The company's operating cash flow came in at $23 billion. It returned $9.7 billion to shareholders in dividends and share repurchases.
RBC Capital maintained an Outperform rating on Microsoft Corporation (NASDAQ:MSFT) in October with a $310 price target, appreciating the company’s fiscal Q1 2023 results. The firm also highlighted the company’s management and its execution.
Microsoft Corporation (NASDAQ:MSFT) was the most popular stock among hedge funds in Q3 2022, as 269 funds owned stakes in the company, up from 258 in the previous quarter. The collective value of these stakes is over $61.1 billion.
Diamond Hill Capital mentioned Microsoft Corporation (NASDAQ:MSFT) in its Q3 2022 investor letter. Here is what the firm has to say:
“Also among our bottom contributors were media and technology giant Alphabet, software and IT services provider Microsoft Corporation (NASDAQ:MSFT) and insurance company American International Group (AIG). Microsoft shares declined in Q3, along with other tech companies, as rising interest rates impacted the near-term outlook. We expect the business to continue to generate strong revenue growth and benefit from operating leverage. Microsoft’s cloud computing services business, Azure, is generating robust growth, confirming its competitive positioning.”
10. UnitedHealth Group Incorporated (NYSE:UNH)
Dividend Yield as of November 21: 1.27%
UnitedHealth Group Incorporated (NYSE:UNH) is an American multinational managed healthcare and insurance company. In October, Deutsche Bank raised its price target on the stock to $615 with a Buy rating on the shares, following the company's Q3 earnings and membership strength.
On November 4, UnitedHealth Group Incorporated (NYSE:UNH) declared a quarterly dividend of $1.65 per share, which fell in line with its previous dividend. The company started paying annual dividends in 1990 and shifted to quarterly payouts in 2010. Since then, it has paid regular dividends to shareholders. The stock's dividend yield on November 21 came in at 1.27%.
In Q3 2022, UnitedHealth Group Incorporated (NYSE:UNH) generated $18.5 billion in operating cash flow and its adjusted cash flow from operations stood at $8.8 billion. In the first nine months of the year, the company returned $10.5 billion to shareholders through share repurchases and dividends, which makes it one of the best dividend stocks to buy.
The number of hedge funds tracked by Insider Monkey owning stakes in UnitedHealth Group Incorporated (NYSE:UNH) jumped to 110 in Q3 2022, from 91 in the previous quarter. The stakes owned by these hedge funds have a total value of over $10.3 billion.
Carillon Tower Advisers mentioned UnitedHealth Group Incorporated (NYSE:UNH) in its Q2 2022 investor letter. Here is what the firm has to say:
“UnitedHealth Group Incorporated (NYSE:UNH) reported solid quarterly results and raised 2022 guidance modestly. Additionally, managed care is another industry that is viewed as defensive in the current environment, which helped support UnitedHealth and its peer group.”
9. NIKE, Inc. (NYSE:NKE)
Dividend Yield as of November 21: 1.31%
NIKE, Inc. (NYSE:NKE) manufactures footwear, apparel, accessories, and other equipment. The company's products are designed for professional athletes. In fiscal Q1 2023, it remained committed to its shareholder return, paying $480 million in dividends, up 11% from the same period last year. Moreover, the company repurchased shares worth $1 billion during the quarter.
On November 15, NIKE, Inc. (NYSE:NKE), one of the best dividend stocks, declared a quarterly dividend of $0.34 per share, having raised it by 12%. This was the company's 21st consecutive year of dividend growth. As of November 21, the stock's dividend yield came in at 1.31%.
In October, Raymond James initiated its coverage of NIKE, Inc. (NYSE:NKE) with an Outperform rating. The firm mentioned that the stock is a good option for long-term investment.
NIKE, Inc. (NYSE:NKE) was a part of 70 hedge fund portfolios in Q3 2022, down from 72 in the previous quarter, as shown by Insider Monkey's data. The stakes owned by these hedge funds have a total value of over $3.3 billion. Ken Fisher's Fisher Asset Management was the company's largest stakeholder in Q3.
Leaven Partners mentioned NIKE, Inc. (NYSE:NKE) in its Q3 2022 investor letter. Here is what the firm has to say:
“In our last quarterly letter, I briefly mentioned that the consensus estimates for corporate profits appeared to be a bit too sanguine. I referenced a Reuters article that reported, as of June 17, Wall Street expected S&P 500 earnings to grow by 9.6% in 2022, which was up from 8.8% in April and from 8.4% in January. That tune began to change at the end of July and accelerated in August and September, as major players, such as NIKE (NYSE:NKE), has recently issued profit warnings and/or have withdrawn guidance. In response, Wall Street has altered its outlook: lowering third-quarter profit growth to 4.6%[2] from 7.2% in early August and slashing full-year profit growth to 4.5%.”
8. Walmart Inc. (NYSE:WMT)
Dividend Yield as of November 21: 1.48%
An American multinational retail company, Walmart Inc. (NYSE:WMT) is added to our list of the best dividend stocks as the company is just one year away from becoming a Dividend King. It has been raising its dividends consistently for the past 49 years. The company's quarterly dividend currently stands at $0.56 per share for a dividend yield of 1.48%, as of November 21.
In Q3 2022, Walmart Inc. (NYSE:WMT) reported revenue of $152.8 billion, which showed an 8.8% growth from the same period last year. Year-to-date, the company generated $15.7 billion in operating cash flow and $3.6 billion in free cash flow. Its cash generation was enough to cover its dividend payments worth $1.5 billion.
Following the company's Q3 'beat and raise', Morgan Stanley raised its price target on Walmart Inc. (NYSE:WMT) in November to $164 with an Overweight rating on the shares.
As of the end of Q3 2022, 68 hedge funds tracked by Insider Monkey were bullish on Walmart Inc. (NYSE:WMT), compared with 67 in the previous quarter. The collective value of stakes owned by these hedge funds is over $4.08 billion.
Leaven Partners mentioned Walmart Inc. (NYSE:WMT) in its Q3 2022 investor letter. Here is what the firm has to say:
“In our last quarterly letter, I briefly mentioned that the consensus estimates for corporate profits appeared to be a bit too sanguine. I referenced a Reuters article that reported, as of June 17, Wall Street expected S&P 500 earnings to grow by 9.6% in 2022, which was up from 8.8% in April and from 8.4% in January. That tune began to change at the end of July and accelerated in August and September, as major players, such as Walmart (NYSE:WMT), has recently issued profit warnings and/or have withdrawn guidance. In response, Wall Street has altered its outlook: lowering third-quarter profit growth to 4.6%[2] from 7.2% in early August and slashing full-year profit growth to 4.5%.”
7. Accenture plc (NYSE:ACN)
Dividend Yield as of November 21: 1.56%
Accenture plc (NYSE:ACN) is an Irish-American information technology company that specializes in related services and consulting. In October, JPMorgan maintained an Overweight rating on the stock with a $306 price target, appreciating the company's fundamental and business model in the current environment.
In fiscal Q4 2022, Accenture plc (NYSE:ACN) posted revenue of $15.4 billion, which saw a 14.9% growth from the same period last year. The company's free cash flow for the quarter came in at $3.6 billion and its operating cash flow came in at $3.8 billion. Its cash flow was sufficient as the company's dividend payments for the quarter amounted to $614 million.
On September 22, Accenture plc (NYSE:ACN) announced a 15.5% hike in its quarterly dividend to $1.12 per share. This marked the company's 17th consecutive year of dividend growth. The stock has a dividend yield of 1.56%, as recorded on November 21.
At the end of Q3 2022, 58 hedge funds in Insider Monkey's database owned stakes in Accenture plc (NYSE:ACN), down from 61 in the previous quarter. The collective value of these stakes is over $3.47 billion.
Distillate Capital Partners LLC mentioned Accenture plc (NYSE:ACN) in its third-quarter 2022 investor letter. Here is what the firm has to say:
“The largest new purchases includes Accenture plc (NYSE:ACN). Accenture modestly lagged the market last quarter and became similarly attractive enough to warrant ownership. Similar to our prior presentations, one way to visualize the current portfolio and note recent changes versus the benchmark is to look at scatter plot of all of Distillate’s FSV holdings versus those in the benchmark with valuation on the vertical axis and free cash ?ow stability on the horizontal axis.”
6. Parker-Hannifin Corporation (NYSE:PH)
Dividend Yield as of November 21: 1.74%
Parker-Hannifin Corporation (NYSE:PH) is an Ohio-based manufacturing company that specializes in motion and control technologies. Citigroup resumed its coverage on the stock in October with a Neutral rating, presenting a positive stance on the overall industry due to growing demand for tech products.
In fiscal Q1 2023, Parker-Hannifin Corporation (NYSE:PH) reported revenue of $4.23 billion, up 12.5% from the same period last year. Year-to-date, the company's operating cash flow came in at $457.4 million, compared with $424.4 million in the prior-year period.
Parker-Hannifin Corporation (NYSE:PH) holds one of the longest dividend growth track records in the S&P 500. The company has raised its payouts consistently for the past 66 years, which makes it one of the best dividend stocks alongside Exxon Mobil Corporation (NYSE:XOM), PepsiCo, Inc. (NASDAQ:PEP), and The Procter & Gamble Company (NYSE:PG). The company currently pays a quarterly dividend of $1.33 per share for a dividend yield of 1.74%.
As of the close of Q3 2022, 45 hedge funds tracked by Insider Monkey owned stakes in Parker-Hannifin Corporation (NYSE:PH), growing from 35 in the previous quarter. These stakes are collectively worth over $848.3 million.
Oakmark Funds mentioned Parker-Hannifin Corporation (NYSE:PH) in its Q2 2022 investor letter. Here is what the firm has to say:
“A former long-time holding, Parker Hannifin (NYSE:PH) made its way back into the Fund this quarter. We believe investors’ perception of the company as a short-cycle, diversified manufacturer that’s heavily tied to industrial production has become stale. Since becoming CEO in 2015, Thomas Williams has vastly improved operations and shifted the portfolio to a longer cycle, higher growth, and higher return end markets. With the expected closing of the Meggitt acquisition this calendar year, Parker Hannifin’s highly depressing aerospace segment will become its largest end market. We anticipate a rebound in aerospace revenue, which combined with the company’s strong position in attractive businesses like clean energy technologies and factory automation-should further accelerate revenue growth. Parker Hannifin trades at a discount to other high-quality industrials, which we believe is unwarranted since its growth and returns should be as good or better than peers. At 12x next year’s cash earnings, Parker Hannifin is an attractive investment, in our view.”
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Disclosure. None. 14 Best Blue Chip Dividend Stocks to Buy is originally published on Insider Monkey.
