Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.
A recent study from the Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the past half-century (1973-2023). Over the same timeline, this was more than double the annualized return for non-payers (3.95%).
Most dividend investors seek solid passive income streams from quality dividend stocks. Passive income is a steady stream of unearned income that doesn’t require active traditional work. Shared ideas for earning passive income include investments, real estate, or side hustles.
We screened our 24/7 Wall St. passive income research database, looking for the top dividend stocks that can supply consistent, dependable income for investors looking to establish a solid passive income stream. Six Blue-Chips stocks made the grade, and all are rated Buy on Wall Street.
AT&T
AT&T is the world’s fourth-largest telecommunications company in terms of revenue.
The legacy telecommunications company has been going through a lengthy restructuring while lowering the dividend, which still stands at a rich 6.45%. AT&T, Inc. (NYSE: T | T Price Prediction) provides worldwide telecommunications, media, and technology services.
Its Communications segment offers wireless voice and data communications services.
AT&T sells through its company-owned stores, agents, and third-party retail stores:
- Handsets
- Wireless data cards
- Wireless computing devices
- Carrying cases
- Hands-free devices
AT&T also provides:
- Data
- Voice
- Security
- Cloud solutions
- Outsourcing
- Managed and professional services
- Customer premises equipment for multinational corporations, small and mid-sized businesses, and governmental and wholesale customers.
In addition, this segment offers residential customers broadband fiber and legacy telephony voice communication services.
It markets its communications services and products under :
- AT&T
- Cricket
- AT&T PREPAID
- AT&T Fiber
The company’s Latin America segment provides wireless services in Mexico and video services in Latin America. This segment markets its services and products under the AT&T and Unefon brands.
Chevron
Chevron is the second-largest direct descendant of Standard Oil.
This integrated giant is a safer way for investors looking to position themselves in the energy sector. It pays a rich 4.35% dividend, and Buffett added 16 million shares in the first quarter. Chevron Corporation (NYSE: CVX) engages in integrated energy and chemicals operations worldwide through its subsidiaries.
The company operates in two segments:
- Upstream
- Downstream
The Upstream segment is involved in the following:
- Exploration, development, production, and transportation of crude oil and natural gas;
- Processing, liquefaction, transportation, and regasification associated with liquefied natural gas
- Transportation of crude oil through pipelines
- Transportation, storage, and marketing of natural gas, as well as operating a gas-to-liquids plant
The Downstream segment engages in:
- Refining crude oil into petroleum product
- Marketing crude oil, refined products, and lubricants
- Manufacturing and marketing renewable fuels
- Transporting crude oil and advanced products by pipeline, marine vessel, motor equipment, and rail car
- Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives
Chevron announced in the fall that it has entered into a definitive agreement with Hess Corporation (NYSE: HES) to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on October 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The transaction’s total enterprise value, including debt, is $60 billion.
Berkshire Hathaway owns 6.8% of Chevron’s outstanding stock with 126,093,326 shares, and the energy giant makes up 5.1% of the portfolio.
Kenvue
Kenvue is the proprietor of well-known brands such as Aveeno, Band-Aid, Benadryl, Zyrtec, Johnson’s, Listerine, Mylanta, Neutrogena, Tylenol, and Visine.
Spun off from Johnson & Johnson, Inc. (NYSE: JNJ) last year, this potential total return home run pays a solid 4% dividend. Kenvue Inc. (NYSE: KVUE) is a global consumer health company.
The company operates through three segments:
- Self Care
- Skin Health and Beauty
- Essential Health
The self-care segment offers cough, cold, and allergy pain care, digestive health, smoking cessation, and other products under:
- Tylenol,
- Nicorette
- Zyrtec brands.
The Skin Health and Beauty segment provides face and body care, hair care, sun care, and other products under:
- Neutrogena
- Aveeno
- OGX brand names.
The Essential Health segment offers oral and baby, women’s health, and wound care products under:
- Listerine
- Johnson’s
- Band-Aid
- Stayfree brands
Pfizer
The company was established in 1849 in New York by two German entrepreneurs.
This top pharmaceutical stock was a massive winner in the COVID-19 vaccine sweepstakes but has been crushed as many are not getting boosters. Pfizer Inc. (NYSE: PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide and pays a hefty 6.17% dividend, which has risen yearly for the last 14 years.
The company offers medicines and vaccines in various therapeutic areas, including:
- 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.
Pfizer also provides medicines and vaccines in various therapeutic areas, such as:
- Pneumococcal disease, meningococcal disease, tick-borne encephalitis
- 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
Plains All American Pipeline
Plains All-American owns and operates midstream energy infrastructure and provides logistics services.
This stock has been locked in a tight trading range, looks ready to break out, and pays a fat 7.60% dividend. Plains All American Pipeline, L.P. (NYSE: PAA), through its subsidiaries, transports, terminals, stores, and gathers crude oil and natural gas liquids (NGL) in the United States and Canada through pipelines.
The company operates in two segments:
- Crude Oil
- Natural Gas Liquids (NGL)
The Crude Oil segment offers:
- Gathering and transporting crude oil through pipelines
- Gathering systems,
- Trucks, barges, or railcars
- This segment provides terminalling, storage, and other facilities-related services and merchant activities
The Natural Gas Liquids segment provides:
- Gathering
- Fractionation
- Storage
- Transportation
- Terminalling activities
- This segment also involves ethane, propane, normal butane, iso-butane, natural gasoline, and crude oil refining processes.
Universal Corporation
Universal Corporation is one of the world’s top tobacco merchants
While this company’s products, like Altria’s, may not be for everyone, they have strong demand, have been in business for almost 150 years, and offer shareholders a hefty 6.32% dividend. Universal Corporation (NYSE: UVV) processes and supplies leaf tobacco and plant-based ingredients worldwide.
The company operates through two segments:
- Tobacco Operations
- Ingredients Operations.
It is involved in procuring, financing, processing, packing, storing, and shipping leaf tobacco for sale to manufacturers of consumer tobacco products.
The company contracts, purchases, processes, and sells flue-cured, burley, and oriental tobaccos primarily used in the manufacture of cigarettes and dark air-cured tobaccos primarily used in the manufacture of cigars, naturally wrapped cigars and cigarillos, smokeless, and pipe tobacco products.
Universal Corporation also provides value-added services, including:
- Blending
- Chemical and physical tobacco testing
- Service cutting for various manufacturers
- Manufacturing reconstituted leaf tobacco
- Just-in-time inventory management services
- Electronic nicotine delivery systems
- Customer smoke testing services
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