24/7 Insights

• Wounded blue chip stocks can offer huge total return potential.
• Stocks that pay big dividends can help provide long-term passive income streams.
• Access two legendary, high-yield dividend stocks Wall Street loves.

For nearly a century, dividends have been a cornerstone of the financial market, contributing approximately 32% of the total return for the S&P 500 since 1926. While capital appreciations have played a significant role, contributing 68%, this data underscores the enduring importance of sustainable dividend income and capital appreciation potential in shaping total return expectations.

A study from the Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks have been a winning strategy, delivering an annualized return of 9.18% over the past half-century (1973 to 2023). This was more than double the annualized return for non-payers (3.95%), proving the power of dividends in generating wealth.

Over the last 50 years, many top growth and income stocks that were once setting the standard for their sector have toppled for one reason or another. Sometimes, they veer from the model that brought them success; in other instances, poor management at the C-suite level and overspending of corporate capital lead to the downfall. Sometimes, the product or service that brought them tremendous success either goes out of favor or fades from being needed.

We decided to screen our 24/7 Wall St. penalty box list of large-cap stocks looking for companies that, for one reason or another, have been sent to the Wall Street woodshed and are languishing way below previous all-time highs. Five top companies hit our screens, paying stellar ultra-high-yield blue chip dividends. In addition, all five are rated Buy at top Wall Street firms.

Why buy beat-up blue chip dividend stocks?

Patient investors with a long-term time horizon can reap the benefits of a rebound by a large-cap leader that has been dethroned for one reason or another if the company rebounds in a significant way. In the meantime, they get paid a big dividend while waiting for a return to past glory.

AT&T

The legacy telecommunications company has been going through a lengthy restructuring, while lowering the dividend, which still checks in at 6.41%. 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 broadband fiber and legacy telephony voice communication services to residential customers.

It markets its communications services and products under these brands:

• 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.

Bristol-Myers Squibb

This top company remains a solid pharmaceutical stock to own long-term, offering an outstanding entry point and a massive 4.68% dividend. Bristol-Myers Squibb Co. (NYSE: BMY) discovers, develops, licenses, manufactures, and markets pharmaceutical products worldwide.

The company offers products in hematology, oncology, cardiovascular, and immunology therapeutic classes.

The company’s products include:

• Revlimid, an oral immunomodulatory drug for the treatment of multiple myeloma
• Opdivo for anti-cancer indications
• Eliquis, an oral inhibitor indicated for the reduction in risk of stroke/systemic embolism in NVAF and for the treatment of DVT/PE
• Orencia for adult patients with active RA and psoriatic arthritis, as well as reducing signs and symptoms in pediatric patients with active polyarticular juvenile idiopathic arthritis

The company also provides:

• Sprycel for the treatment of Philadelphia chromosome-positive chronic myeloid leukemia
• Yervoy for the treatment of patients with unresectable or metastatic melanoma
• Abraxane, a protein-bound chemotherapy product
• Implicit for the treatment of multiple myeloma
• Reblozyl for the treatment of anemia in adult patients with beta-thalasse

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 5.68% 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

Trading at its lowest split-adjusted level in thirteen years, the stock is an incredible bargain at current levels and pays a massive dividend. Despite a stunning 44% decline in profits, the company still posted first-quarter earnings that came in above Wall Street estimates. The company reported $0.55 diluted earnings per share and $14.9 billion in first-quarter sales, trouncing analysts’ $0.51 and $13.87 billion estimates, respectively.

While the pharmaceutical giant reported its fifth straight year of year-over-year revenue and net income declines, the numbers are still skewed somewhat from the enormous revenues posted during the pandemic. Patient investors will get paid one of the highest blue-chip dividends going, and shares trade at a reasonable 10.75 times estimated 2025 earnings.

Verizon Communications

This top telecommunications company offers tremendous value and pays investors a 6.46% dividend. Verizon Communications Inc (NYSE: VZ)  through its subsidiaries, engages in the provision of communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide.

It operates in two segments:

• Verizon Consumer Group 
• Verizon Business Group 

The Consumer segment provides wireless services across the wireless networks in the United States under the Verizon and TracFone brands and through wholesale and other arrangements; and fixed wireless access (FWA) broadband through its wireless networks, as well as related equipment and devices, such as smartphones, tablets, smartwatches, and other wireless-enabled connected devices.

The segment also offers wireline services in the Mid-Atlantic and Northeastern United States and Washington D.C. through its fiber-optic network, Verizon Fios product portfolio, and a copper-based network.

The Business segment provides wireless and wireline communications services and products, including:

• FWA broadband
• Data
• Video and conferencing
• Corporate networking
• Security and managed network
• Local and long-distance voice
• Network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally

Five Under-$20 Dividend Stocks to Buy Now

Walgreens Boots Alliance

This huge drugstore chain is a safe retail play, paying a 6.17% dividend. Walgreens Boots Alliance Inc. (NASDAQ: 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 health care supplies and equipment, as well as provides related services to pharmacies and other health care providers.

The shares were hit hard after the company cut the dividend earlier this year, but with management once again trying to sell the Boots pharmacies, based in the United Kingdom, investors have once again started to bid the shares higher.

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