Investors love dividend stocks, especially the blue-chip variety because they offer a significant income stream and have massive total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. Blue chip stocks are shares of large, well-established companies considered less risky and more financially stable than other stocks. They are often industry leaders with strong brand names and reputations and a history of consistent growth.

It never fails. Every earnings season, a handful of top companies either miss the Wall Street earnings and revenue estimates, give poor forward guidance, or drop a bombshell about the company on a forward basis. The fourth quarter of 2024 was no exception to that tried-and-true rule. Three top companies, all dominant players in their respective sectors, hit the wall and posted poor results, and in one case, dropped a bombshell Wall Street did not see coming. All pay rich, high-yield dividends, and while they may spend some time in the Wall Street penalty box, they could come back stronger than before. All three remain Buy-rated at top Wall Street firms and will keep those dividends flowing, and one raised its dividend.

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.

Chevron

This integrated giant is a safer option for investors looking to position themselves in the energy sector. Chevron’s board raised the energy giant’s quarterly dividend last week by 4.9%, to $1.71 from $1.63. The new payout, equal to $6.84 a year, is a hefty 4.58% dividend. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide through its subsidiaries.

Chevron stock fell almost 5% on Friday after a disappointing fourth-quarter earnings report. It lost money in its refining business for the first time in four years and missed analysts’ earnings expectations. Investors can grab shares now on sale and buy a stock that Warren Buffett owns 118,610,534 shares of which equals 6.6% of the company.

The company operates in two segments:

• Upstream
• Downstream

The Upstream segment is involved in the following:

• Exploration, development, production, and transportation of crude oil and natural gas
• Processing, liquefaction, transportation, and regasification associated with liquefied natural gas
• Transportation of crude oil through pipelines; and transportation, storage
• Marketing of natural gas, as well as operating a gas-to-liquids plant

The Downstream segment engages in:

• Refining crude oil into petroleum products
• Marketing crude oil, refined products, and lubricants
• Manufacturing and marketing renewable fuels
• Transporting crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car
• Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives

It also involves cash management, debt financing, insurance operations, real estate, and technology businesses.

Chevron announced in the fall of 2023 that it has entered into a definitive agreement with Hess Corp. (NYSE: HES) to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on October 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The transaction’s total enterprise value, including debt, is $60 billion, and the deal was approved by the FTC last fall. It should finally close this summer.

UPS

With the explosion of internet commerce, this company still has enormous growth potential and offers a rich 5.71% dividend. United Parcel Service Inc. (NYSE: UPS) is a package delivery company that provides transportation and delivery, distribution, contract logistics, ocean freight, air freight, customs brokerage, and insurance services.

The company announced last week that it will dramatically cut its business with Amazon.com Inc. (NASDAQ: AMZN). Along with posting mixed fourth-quarter results, UPS stock hit the wall and dived to a multiyear low. The CEO Carol Tome noted this when discussing the change: “Amazon is our largest customer, but it’s not our most profitable customer. … Its margin is very dilutive to the U.S. domestic business.” She also noted, “The result of this change will be lower overall volume levels but an improved customer mix at a significantly higher revenue per piece.”

In the fourth quarter, UPS earnings rebounded 11% to $2.75 per share, beating estimates for $2.53. Revenue recovered 1.5%, year over year, to $25.3 billion, which was a slight miss. It marked the shipper’s second quarter of earnings and sales gains following several down quarters.

UPS operates through two segments:

• U.S. Domestic Package
• International Package

The U.S. Domestic Package segment offers time-definite delivery of letters, documents, small packages, and palletized freight through air and ground services in the United States.

The International Package segment provides guaranteed-day and time-definite international shipping services, comprising guaranteed-time-definite express options in:

• Europe
• Asia
• the Indian subcontinent
• the Middle East
• Africa
• Canada
• Latin America

UPS is not just a package delivery company. It also provides diverse services, including international air and ocean freight forwarding, post-sales, and mail and consulting services.

Furthermore, it offers:

• Truckload brokerage services
• Supply chain solutions to the healthcare and life sciences industries
• Financial and information services
• Fulfillment and transportation management services

This broad portfolio of services ensures the company’s stability and potential for growth, making it an attractive investment option, especially after a drastic change in the business model.

Whirlpool

With massive institutional ownership and backing, the potential for new home sales in 2025 to increase is a big positive for this company, which now pays a dependable 6.67% dividend. Whirlpool Corp. (NYSE: WHR) manufactures and markets home appliances and related products.

Whirlpool posted fourth-quarter 2024 results, which beat Wall Street estimates and increased year over year. However, top-line revenue declined year over year. The stock was hammered 18% after the results were posted, as the company reported a fourth-quarter loss and offered some weak forward guidance.

Board Chair and CEO Marc Bitzer said this when the company released the results last week:

In 2024, we continued to make progress in our operations and delivered on our cost take-out commitment of $300 million while achieving the closure of the Europe transaction, supporting our ongoing portfolio transformation, In 2025, we expect to deliver more than $200 million of cost take out and position our business for the eventual U.S. housing  recovery.

The company also plans to pay down a whopping $700 million in debt this year and is trimming its holding in Whirlpool of India Ltd. by about 20% through a market sale.

Whirlpool operates through four segments:

• North America
• Europe
• Middle East and Africa
• Latin America and Asia

The company’s principal products include:

• Refrigerators, freezers, ice makers, and refrigerator water filters
• Laundry appliances and related laundry accessories
• Cooking and other small domestic appliances
• Dishwasher appliances and associated accessories, as well as mixers

Whirlpool markets and distributes its products primarily under these brand names:

• Whirlpool
• Maytag
• KitchenAid
• JennAir
• Amana
• Roper
• Admiral
• Affresh
• Gladiator
• Speed Queen
• Hotpoint
• Bauknecht
• Indesit
• Ignis
• Laden
• Privileg
• KIC
• Consul
• Brastemp
• Across
• Ariston
• Diqua
• Royalstar

For Almost $14,000 per Year in Dependable Passive Income, Invest $25,000 in These 4 Stocks

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.