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%).

Stocks and sectors go in and out of favor with investors for several reasons, but one thing that is mystifying to many is how solid blue-chip stocks, many of which have been category leaders for years, go out of favor. Many things can change a company’s trajectory, but when they are all but abandoned, especially blue-chip dividend leaders, that’s the time when investors can score big and buy passive income gems. 

Most dividend investors seek solid passive income streams of 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. blue-chip dividend research database, looking for top stocks that have been all but forgotten, pay shareholders dividends in a big way, and may be poised to bounce back, especially if the stock market takes a big leg down. Six top companies fit the bill perfectly, all rated Buy by top Wall Street firms. 

3M

This top company could jump with a second-half economic pick-up. The shares have rallied over the last month and pay a solid 6.61% dividend. 3M Company (NYSE: MMM) is a diversified technology company worldwide.

It operates through four segments:

• Safety and Industrial
• Transportation and Electronics
• Health Care
• Consumer

The Safety and Industrial segment offers:

• Industrial abrasives and finishing for metalworking applications
• Auto body repair solutions
• Closure systems for personal hygiene products
• Masking and packaging materials
• Electrical products and materials for construction and maintenance
• Power distribution and electrical original equipment manufacturers
• Structural adhesives and tapes
• Respiratory, hearing, eye, and fall protection solutions
• Natural and color-coated mineral granules for shingles

The 3M Transportation and Electronics segment provides:

• Ceramic solutions
• Attachment tapes
• Films, sound, and temperature management for vehicles
• Premium large-format graphic films for advertising and fleet signage
• Light management films and electronics assembly solutions
• Packaging and interconnection solutions
• Reflective signage for highway and vehicle safety

Italy, the company’s Healthcare segment offers:

• Food safety indicator solutions
• Healthcare procedure coding and reimbursement software
• Skin, wound care, and infection prevention products and solutions
• Dentistry and orthodontic solutions
• Filtration and purification systems

The Consumer segment provides:

• Consumer bandages
• Braces, supports, and consumer respirators;
• Cleaning products for the home
• Retail abrasives
• Paint accessories
• Car care DIY products
• Picture hanging
• Consumer air quality solutions
• Stationery products

AT&T

The legacy telecommunications company has been undergoing a lengthy restructuring while lowering its dividend, which still stands at 6.45%. AT&T, Inc. (NYSE: T) 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.

Best Buy

The electronics retail giant is priced to be bought and offers a hefty 4.8% dividend. Best Buy Inc. (NYSE: BBY) sells technology products in the United States and Canada.

The company operates in two segments:

• Domestic 
• International

Its stores provide:

• Computing and mobile phone products, such as desktops, notebooks, and peripherals
• Mobile phones comprising related mobile network carrier commissions; networking products
• Tablets covering e-readers; smartwatches
• Consumer electronics consist of digital imaging, health and fitness products, home theater, portable audio comprising headphones and speakers, and smart home products.

The company’s stores also offer:

• Appliances such as dishwashers, laundry, ovens, refrigerators, blenders, coffee makers, and vacuums
• Entertainment products such as drones, peripherals, movies, music, and toys
• Gaming hardware and software, virtual reality, and other software products
• Additional products include baby, food and beverage, luggage, outdoor living, and sporting goods.

In addition, it provides consultation, delivery, design, installation, memberships, repair, set-up, technical support, health-related, and warranty-related services.

Pfizer

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

Simon Property Group

This leading company has rallied off the 2023 lows, offering patient investors a hefty 5.39% dividend. Simon Property Group Inc. (NYSE: SPG) invests in the global real estate markets.

The company invests, owns, manages, and develops properties.

Simon Property Group primarily invests in:

• Regional malls
• Premium outlets
• Mills
• Community/lifestyle centers

Through its subsidiary partnership, it owns or has an interest in about 230 properties in the US and Asia.

The company also has a 28.9% interest in Klepierre, a European REIT with over 260 shopping centers in 13 countries.

Walgreens Boots Alliance

This huge drugstore chain is a safe retail play, paying a big 5.60% dividend. Walgreens Boots Alliance (NYSE: WBA) is a pharmacy-led health and beauty retail company with three segments:

• Retail Pharmacy USA
• Retail Pharmacy International
• Pharmaceutical Wholesale

The Retail Pharmacy USA segment sells prescription drugs and various retail products, including health, wellness, beauty, personal care, consumables, and general merchandise products, through its retail drugstores.

It also provides specialty pharmacy services and mail services. This segment operates nearly 10,000 retail stores under the Walgreens and Duane Reade brands in the United States and six specialty pharmacies.

Walgreens Boots Alliance’s Retail Pharmacy International segment is a testament to its diverse product offerings. It sells prescription drugs, health and wellness products, beauty products, personal care products, and other consumer products through its pharmacy-led health and beauty stores and optical practices.

The International segment has operations in:

• The United Kingdom,
• Thailand,
• Norway,
• The Republic of Ireland,
• The Netherlands
• Mexico
• Chile 

The company also operates 550 optical practices, including 165 on a franchise basis.

The Pharmaceutical Wholesale segment engages in the wholesale and distribution of specialty and generic pharmaceuticals, health and beauty products, and home healthcare supplies and equipment, as well as provides related services to pharmacies and other healthcare providers.

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