Beware Never-Ending Inflation Baby Boomers: 5 High-Yield Blue Chip Dividend Giants Can Help

Investing

Published: February 1, 2025 7:14 am

Getting to retirement age can be a blessing and a curse, and 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.

24/7 Wall St. Key Points:

Inflation is better than a couple of years ago but remains sticky.
The Social Security increase for 2025 was below the current inflation rate.
Quality blue-chip dividend stocks that are high-yielding can help.
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While many seniors have enjoyed a long bull market over the past 35 years, there is a point when income becomes more critical than stock appreciation. The reason is simple: those who leave their careers to enjoy a well-deserved retirement lose the benefit of a regular salary and benefits associated with their jobs, like 401(k) matching and company-paid healthcare. In addition, many baby boomers take advantage of their retirement years to travel and enjoy the rewards they have worked to achieve for a lifetime.

One issue that remains at the forefront for seniors is inflation, and it is a cause for concern. The Federal Reserve aggressively raised rates after inflation reached a massive 9.1% in the summer of 2022 and has since lowered the federal funds rate a whole percentage point to an effective rate of 4.33%, as inflation has stayed stubborn and has held at the 3% level. That is way above the Fed’s 2% target. In addition, they have made it known that there will likely be only two rate cuts in 2025 due to ongoing inflation concerns.

The problem for baby boomers is that the cost-of-living adjustment (COLA) for Social Security in 2025 was just 2.5%, which doesn’t match the overall inflation rate of 3% and the actual rate for many items like groceries and other essentials, which is even higher. At 24/7 Wall St., we have closely followed dividend-paying stocks for over 15 years. Quality, high-yield blue chip stocks can deliver dependable passive income to help bridge the inflation gap. Here are five that make sense now, and all are rated Buy by top Wall Street firms.

Why do we cover blue-chip dividend stocks?

Blue chip 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.

Altria

a top dividend pick for retirees — Altria is one of the world’s largest producers and marketers of cigarettes and other tobacco-related products.

This tobacco company offers value investors a great entry point and a rich 7.77% dividend. Altria Group Inc. (NYSE: MO) manufactures and sells smokable and oral tobacco products in the United States through its subsidiaries.

The company provides cigarettes primarily under the Marlboro brand, as well as:

Cigars and pipe tobacco, principally under the Black & Mild brand
Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
on! Oral nicotine pouches
e-vapor products under the NJOY ACE brand

It sells its tobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.

Altria used to own over 10% of Anheuser-Busch InBev N.V. (NYSE: BUD) the world’s largest brewer. The company sold 35 million of its 197 million shares through a global secondary offering last year. That represents 18% of their holdings but still leaves a hefty 8% of the outstanding shares in their back pocket. They also announced a $2.4 billion stock repurchase plan partially funded by the sale.

Enterprise Products Partners

This company is one of the largest publicly traded energy partnerships and pays a 6.61% dividend. Enterprise Products Partners L.P. (NYSE: EPD) provides various midstream energy services, including:

Gathering
Processing
Transporting and storing natural gas, natural gas liquids (NGL) fractionation
Import and export terminalling
Offshore production platform services

The company has four reportable business segments:

Natural Gas Pipelines and Services
NGL Pipelines and Services
Petrochemical Services
Crude Oil Pipelines and Services

One reason many analysts like the stock might be its distribution coverage ratio. The company’s coverage ratio is well above 1x, making it relatively less risky in the MLP sector.

Eversource Energy

Eversource is an energy provider serving customers in Connecticut, Massachusetts, and New Hampshire.

This is a conservative stock idea that is off the radar and pays a 5% dividend. Eversource Energy (NYSE: ES) is a public utility holding company engaged in the energy delivery business.

The company operates through four segments:

Electric Distribution
Electric Transmission
Natural Gas Distribution
Water Distribution

It is involved in the transmission and distribution of electricity, solar power facilities, and natural gas.

The company operates regulated water utilities that provide water services to approximately 241,000 customers. It serves residential, commercial, industrial, municipal, and fire protection customers in Connecticut, Massachusetts, and New Hampshire.

Pfizer

This top pharmaceutical stock was a massive winner in the COVID-19 vaccine sweepstakes but has been beaten down over the last few years as many are not getting boosters. Pfizer Inc. (NYSE: PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide and pays a hefty 6.45% dividend, which has risen yearly for the past 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 not far from its lowest split-adjusted level in thirteen years, the stock is an incredible bargain at current levels and pays a massive dividend. In addition, with a strong pipeline and estimated 2025 earnings between $61 and $64 billion, investors can sleep soundly.

Verizon

This top telecommunications company offers tremendous value, trading at 9.5 times estimated 2025 earnings and paying investors a strong 6.75% dividend. Verizon Communications Inc. (NYSE: VZ) provides 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.

Verizon also provides fixed wireless access (FWA) broadband through its wireless networks and 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, including the District of Columbia, and the northeastern United States 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

Jefferies Says Buy Large Cap High-Yield Dividend Energy Giants Hand-Over-Fist