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 the fourth-quarter earnings season in full swing, we decided to screen our high-yield blue chip stock database for companies that investors still need to pay attention to. We came across five that growth and income investors should explore now. All pay reliable dividends, are leaders in their respective sectors, and have Buy ratings from top Wall Street firms.
Why do we cover 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.
BP
This British multinational oil and gas company is headquartered in London.
This company is a premier European integrated oil giant, paying shareholders a hefty 5.84% divided. BP PLC (NYSE: BP | BP Price Prediction) engages in the energy business worldwide.
It operates through these segments:
- Gas & Low Carbon Energy
- Oil Production & Operations
- Customers & Products
- Rosneft
BP produces and trades:
- Natural gas
- Offers biofuels
- Operates onshore and offshore wind and solar power-generating facilities
- Provides de-carbonization solutions and services, such as hydrogen and carbon capture, usage, and storage
The company is also involved in the convenience and mobility business, which manages the sale of fuels to wholesale and retail customers, convenience products, aviation fuels, and Castrol lubricants; refining, supply, and trading of oil products; and operation of electric vehicle charging facilities.
In addition, it produces and refines oil and gas and invests in upstream, downstream, and alternative energy companies, advanced mobility, bio and low-carbon products, carbon management, digital transformation, and power and storage areas.
Brookfield Renewable Partners
A publicly traded limited partnership that owns and operates renewable power assets.
Producing renewable energy and paying a hefty 5.62% dividend is an excellent idea now. Brookfield Renewable Partners L.P. (NYSE: BEP) owns a portfolio of renewable power generating facilities in North America, Colombia, and Brazil.
The company generates electricity through:
- Hydroelectric
- Wind
- Solar
- Distributed generation
- Pumped storage
- Renewable natural gas
- Carbon capture and storage
- Recycling
- Cogeneration biomass
- Nuclear services
- Power transformation
Brookfield Renewable Partners operates as the general partner of Brookfield Renewable Partners. The company was formerly known as Brookfield Renewable Energy Partners and changed its name in May 2016.
Ford
An American automotive corporation founded in 1903 by Henry Ford and 11 associate investors.
This legacy carmaker pays shareholders a rich 5.72 dividend. Ford Motor Co. (NYSE: F) develops, delivers, and services a range of Ford trucks, commercial cars and vans, sport utility vehicles, and Lincoln luxury vehicles worldwide.
It operates through five segments:
- Ford Blue
- Ford Model e
- Ford Pro
- Ford Next
- Ford Credit
The company sells Ford and Lincoln vehicles, service parts, and accessories through distributors, dealers, and dealerships to commercial fleet customers, daily rental car companies, and governments.
It also engages in vehicle-related financing and leasing activities to and through automotive dealers.
In addition, the company provides retail installment sale contracts for:
- New and used vehicles
- Direct financing leases for new cars to retail and commercial customers, such as leasing companies, government entities, daily rental companies, and fleet customers.
Further, it offers wholesale loans to dealers to finance the purchase of vehicle inventory, loans to dealers to finance working capital and enhance dealership facilities, purchase dealership real estate, and other dealer vehicle programs.
LyondellBasell
A global leader in developing and supplying materials that enable packaging, health, and transportation solutions.
This blue-chip chemical giant offers a very dependable 5.62% dividend. LyondellBasell Industries N.V. (NYSE: LYB) operates as a chemical company in:
- The United States
- Germany
- Mexico
- Italy
- Poland
- France
- Japan
- China
- the Netherlands
- Internationally
The company operates in six segments:
- Olefins and Polyolefins-Americas
- Olefins and Polyolefins-Europe, Asia, International
- Intermediates and Derivatives
- Advanced Polymer Solutions
- Refining
- Technology
It produces and markets olefins and co-products, polyethylene and polypropylene, propylene oxide and derivatives, oxyfuels and related products, and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide, and ethylene glycol.
In addition, the company produces and markets compounding and solutions, including:
- Polypropylene compounds
- Engineered plastics, masterbatches
- Engineered composites, colors, and powders
- Advanced polymers, including catalloy and polybutene-1
- Refines heavy, high-sulfur crude oil, other crude oils, and refined products, including gasoline and distillates.
Further, it develops and licenses chemical and polyolefin process technologies; manufactures and sells polyolefin catalysts; and serves food packaging, home furnishings, automotive components, and paints and coatings applications.
Wendy’s
The American parent company of the major fast-food chain Wendy’s.
This fast-food favorite pays a delicious 5.62% dividend. Wendy’s Co. (NASDAQ: WEN) and its subsidiaries operate quick-service restaurants in the United States and internationally.
It operates through Wendy’s U.S., Wendy’s International, and Global Real Estate & Development segments. The company operates, develops, and franchises a system of quick-service restaurants specializing in hamburger sandwiches.
It owns and leases real estate properties. The company, formerly known as Wendy’s/Arby’s Group, changed its name in July 2011.
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