Large-capitalization blue-chip dividend stocks are a favorite among investors for a good reason. They provide a steady stream of passive income and offer a promising avenue for total return. Total return, a comprehensive measure of investment performance, encompasses interest, capital gains, dividends, and distributions realized over time. In simpler terms, it is the sum of income and stock appreciation. Dividend stocks can enhance investment success by providing a steady income and capital appreciation.
Despite the massive run the stock market has made over the past two years, many on Wall Street are cautiously optimistic about the prospects for 2025. While another 20% gain is unlikely, 2023 and 2024 were the first consecutive years of 20% gains since the mid-1990s. After the current correction, which has been lightning-fast ends, large-cap dividend stocks could post some excellent results in 2025.
We screened our blue-chip dividend stock database, and four of Wall Street’s most beloved blue-chip stocks are on sale.
Why do we cover blue-chip dividend stocks?
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.
Altria
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 6.97% dividend. Altria Group Inc. (NYSE: MO | MO Price Prediction) 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, the world’s largest brewer. In 2024, the company sold 35 million of its 197 million shares through a global secondary offering. That represents 18% of its holdings but still leaves 8% of the outstanding shares in its back pocket. Altria also announced a $2.4 billion stock repurchase plan partially funded by the sale.
Citigroup
Citigroup Inc., or Citi, is an American multinational investment bank and financial services company.
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 2.81% 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 price.
Exxon Mobil
Exxon manages an industry-leading portfolio of resources and is one of the world’s largest integrated fuels, lubricants, and chemical companies.
The slow but steady increase in oil prices still offers investors an excellent entry point, and they will gladly grab a strong 3.58% 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 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.
Exxon offers greater Downstream/Chemicals exposure than its peers.
Exxon has completed its purchase of oil shale giant Pioneer Natural Resources 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 price objective.
Johnson & Johnson
Johnson & Johnson is an American multinational pharmaceutical, biotechnology, and medical technologies corporation.
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 3.06% dividend. The company researches, develops, manufactures, and sells 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 (IVL) platform for coronary artery disease (CAD) and peripheral artery disease (PAD).
Citigroup has a Buy rating to go with a $185 target price.
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