More conservative investors (boomers) are partying like it is 1999, as money market rates are at 4.5% and certificates of deposit are above the 5% level. Back at the turn of the century. CD yields hit 6.91%, and it was smooth sailing for a few years.
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The question now is whether rate hikes are finished or one or two more 25-basis-point hikes are in store for the markets. One thing is for sure, we are likely near the end of the rate hikes. For growth and income investors, it makes sense to look at blue chip stocks with big and dependable dividends.

We screened our 24/7 large-cap dividend universe looking for true blue chip stocks paying dividends near the money market and CD rate levels. The following five top companies checked all the boxes. While all are rated Buy, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Altria

This maker of tobacco products offers value investors a great entry point now as it has been hit as cigarette sales have slowed. Altria Group Inc. (NYSE: MO) is the parent company of Philip Morris USA (cigarettes), UST (smokeless), John Middleton (cigars), Ste. Michelle Wine Estates and Philip Morris Capital. PMUSA enjoys a 51% share of the U.S. cigarette market, led by its top cigarette brand Marlboro.

Altria also owns over 10% of Anheuser-Busch InBev, the world’s largest brewer, which some feel is worth more than $10 billion and may be a segment of the company that could be sold. When Altria posted solid fourth-quarter results, it also announced a shareholder-friendly $1 billion stock buyback plan.

Altria stock investors receive an 8.40% dividend. Stifel has a $52 target price, while the consensus target is $49.59. The shares closed on Wednesday at $44.95.

Citigroup

This top bank stock has rallied nicely off the lows, and Warren Buffett bought $2.5 billion worth of the shares last summer. Citigroup Inc. (NYSE: C) is a leading global diversified financial service company that provides consumers, corporations and governments a broad range of financial products and services.

The company offers services such as consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management. And it operates and does business in more than 160 countries and jurisdictions in North America, Latin America, Asia and elsewhere.
Trading at a still cheap 7.3 times estimated 2023 earnings, Citigroup looks very reasonable in what remains a volatile stock market and in a sector that has dramatically lagged.

Shareholders receive a 4.44% dividend. Oppenheimer’s $78 price target is a Wall Street high. The consensus target is $57.48, and Citigroup stock closed on Wednesday at $44.49.
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IBM

This blue chip giant still offers investors an incredibly solid entry point. International Business Machines Corp. (NYSE: IBM) is a leading provider of enterprise solutions, offering a broad portfolio of IT hardware, business and IT services and a full suite of software solutions. The company integrates its hardware products with its software and services offerings in order to provide high-value solutions.

IBM operates in five major segments: Cognitive Solutions, Global Business Services, Technology Services & Cloud Platforms, Systems, and Global Financing. The analysts have cited the company’s potential in the public cloud as a reason for their positive outlook going forward.

The company posted a very solid first quarter, with the cloud and Red Hat (the software giant the firm bought in 2019) proving to be big. Red Hat’s open hybrid cloud technologies are now paired with the unmatched scale and depth of IBM’s innovation and industry expertise and sales leadership in more than 175 countries.

The dividend yield here is 5.21%. The Credit Suisse price objective is $162,  and IBM stock has a $140.79 consensus target. Wednesday’s closing print was $125.68.

Pfizer

This top pharmaceutical stock was one of the biggest winners in the COVID-19 vaccine sweepstakes. Pfizer Inc. (NYSE: PFE) discovers, develops, manufactures, markets, distributes and sells biopharmaceutical products worldwide.

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

• 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.
• Pneumococcal disease, meningococcal disease, tick-borne encephalitis and 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

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Investors receive a 4.25% dividend. Pfizer stock has a $75 price objective at Cantor Fitzgerald. The consensus target is down at $47.68, but shares ended Wednesday’s session at $38.63.

Verizon

This top telecommunications stock offers tremendous value at current levels. Verizon Communications Inc. (NYSE: VZ) is one of the largest U.S. telecom companies. It provides wireless and wireline service to retail, enterprise and wholesale customers.

Verizon’s wireless network serves approximately 120 million mobile connections with 115 million postpaid subscribers. Verizon’s wireline business has undergone a period of secular decline due to wireless substitution and cable competition.

The company also provides converged communications, information and entertainment services over America’s most advanced fiber-optic network, and it delivers integrated business solutions to customers worldwide.

Verizon Communications stock comes with a 7.26% dividend. The $49 Cowen price objective compares with a $43.67 consensus target and Tuesday’s close at $35.87.

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While none of these stocks is likely to turn up on Reddit’s WallStreetBets stock bulletin boards, they are very well suited for what could be a very ugly rest of the year. All these companies should hold their ground much better in an inflationary and recessionary stretch like the one we are in now, and likely will remain in for some time to come.

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