While getting to retirement age can be a blessing and a curse, the reality of counting on the U.S. government to provide for your needs is not the best idea. The full retirement age is 66 if you were born from 1943 to 1954. The full retirement age increases gradually if you were born from 1955 to 1960 until it reaches 67; for anyone born in 1960 or later, full retirement benefits are payable at age 67. But those are subject to change, which could be coming soon.

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 study from 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%).

With that in mind, we decided to select six stocks that can provide safe, secure, and reliable dividends while offering the potential for some upside in the stock prices to help defeat the seemingly endless inflation pressure. All six are Wall Street favorites, and all have Buy ratings at major Wall Street firms.

Why do we cover blue chip dividend stocks?

Dividend stocks provide investors with reliable streams of passive income. Passive income is characterized by its ability to generate revenue without requiring the earner’s continuous active effort, making it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.

AT&T

The legacy telecommunications company has been undergoing a lengthy restructuring while lowering its dividend, which still stands at 5.15%. 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.

UBS has a Buy rating with a $30 target price.

Citigroup

This is a top bank that Warren Buffett bought a massive $2.5 billion worth of stock in the summer of 2022. The stock pays a dependable 3.10% dividend. Citigroup Inc. (NYSE: C) is a leading global diversified financial service company that provides consumers, corporations, and governments with a broad range of financial products and services.

Citigroup offers:

• Consumer banking and credit
• Corporate and investment banking
• Securities brokerage
• Transaction services
• Wealth management services.

Citi operates and does business in more than 160 countries/jurisdictions in North America, Latin America, Asia, Europe/Middle East and Africa (EMEA).

Trading at a reasonable 9.2 times estimated 2025 earnings, this company looks very reasonable in what remains a volatile stock market and in a sector that has lagged some in 2024, but looks to be gaining ground.

BofA Securities has a Buy rating with a $95 target.

Exxon Mobil

The slow but steady increase in oil prices still offers investors an excellent entry point, and they will gladly grab a strong 3.62% dividend. Exxon Mobil Corp. (NYSE: XOM) is the world’s largest international integrated oil and gas company, exploring for and producing crude oil and natural gas in:

• The United States
• Canada
• South America
• Europe
• Africa
• Asia
• Australia/Oceania

Exxon Mobil also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and specialty products, and transports and sells crude oil, natural gas, and petroleum products.

Top Wall Street analysts expect the company to remain a key beneficiary in a higher oil price environment, and most remain very optimistic about the company’s sharp positive inflection in capital allocation strategy, upstream portfolio, and leverage to a further demand recovery.
ExxonMobil offers greater Downstream/Chemicals exposure than its peers.

Exxon Mobil has completed its purchase of oil shale giant Pioneer Natural Resources Company in a $59.5 billion all-stock purchase. The deal created the largest U.S. oil field producer and guaranteed a decade of low-cost production.

Piper Sandler has a Buy rating with a $138 target price objective.

Johnson & Johnson

With a diverse product base and a familiar and solid brand, Johnson & Johnson (NYSE: JNJ) is among the most conservative big pharmaceutical companies and pays a 3.04% dividend. The company is engaged in the research and development, manufacture, and sale of a range of healthcare products. Its primary focus is products related to human health and well-being.

It operates through two segments:

• Innovative Medicine
• MedTech

The Innovative Medicine segment is focused on various therapeutic areas, including:

• Immunology
• Infectious diseases
• Neuroscience
• Oncology
• Pulmonary hypertension
• Cardiovascular and metabolic diseases

Products in this segment are distributed directly to retailers, wholesalers, distributors, hospitals, and healthcare professionals for prescription use.

The MedTech segment includes a broad portfolio of products used in the orthopedic, surgery, interventional solutions, cardiovascular intervention, and vision fields.

The MedTech segment also offers a commercially available intravascular lithotripsy platform for coronary artery disease and peripheral artery disease.

Citigroup has a Buy rating to go with a $185 target price objective.

Lockheed Martin

This company is one of the top aerospace and defense stocks to buy. It is close to a big breakout and pays a dependable 2.75% dividend. Lockheed Martin Corp. (NYSE: LMT) researches, designs, develops, manufactures, integrates, operates, and sustains advanced technology systems, products, and services.

The company operates in five principal business segments:

• Aeronautics
• Missiles and Fire Control
• Mission Systems and Training
• Space Systems
• Information Systems and Global Solutions

It also provides a wide range of defense electronics products and IT services.

As the Pentagon’s prime contractor, Lockheed Martin plays a crucial role in national defense, offering a diverse portfolio of global aerospace, defense, security, and advanced technologies.

Its leveraged presence in the Army, Air Force, Navy, and IT programs guarantees a steady inflow of follow-on orders from the U.S. government and many foreign allies of the nation.

Truist Financial has a Buy rating with a $579 price target.

Target

This company remains a solid and safe retail total return play despite some rough public relations issues and pays a solid 3.25% dividend. Target Corp. (NYSE: TGT) is a general merchandise retailer in the United States. It offers apparel for women, men, boys, girls, toddlers, and infants and newborns, as well as jewelry, accessories, and shoes. The company also offers beauty and personal care products, baby gear, cleaning, paper, and pet supplies.

Target also provides:

• Dry grocery dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, and food service
• Electronics, which includes video game hardware and software
• Toys, entertainment, sporting goods, and luggage
• Furniture, lighting, storage, kitchenware, small appliances, home décor, bed and bath
• Home Improvement
• School/office supplies
• Greeting cards, party supplies, and other seasonal merchandise

In addition, the company sells merchandise through periodic design and creative partnerships, shop-in-shop experiences, and in-store amenities. Further, it sells its products through its stores and digital channels, including Target.com.

The company suffered a “Bud Light” moment a few years back after the disastrous merchandising of LGBTQ products, which struck a nerve among many shoppers. While not as bad as the beer giant’s conundrum, it still proved to be a huge negative that has seemingly subsided.

Oppenheimer has an Outperform rating to go with a $165 target.

Four High-Yield Stocks With 7% and Higher Dividends Are 2025 Home Runs

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