Blue-chip stocks are shares of large, well-established, financially stable companies with a consistent and reliable performance history. They are often considered less risky and are a popular choice for long-term investors. Additionally, nearly all leaders in the category pay dependable, recurring dividends each quarter, regardless of the state of the economy. The term “blue chip” originates from the game of poker, where the highest-value chip is blue. With the S&P 500 trading at all-time highs, we decided to look for blue-chip giants that have had a tough 2025 and are solid long-term buys for growth and income investors.
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. For example, if you purchase a stock at $20 that pays a 3% dividend ($0.60 per share) and the price rises to $22 in a year, your total return is ($22 + $0.60 – $20) = 13%. This combines the price appreciation and the dividend received.
Five top blue-chip companies have faced challenges in 2025 for various reasons. While they may not immediately trade higher, they will pay shareholders dependable and, in some cases, hefty dividends while they wait for a turnaround. All five are rated Buy at top Wall Street firms that we cover.
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 appreciation has contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations. A study by Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the 50 years from 1973 to 2023. Over the same timeline, this was more than double the annualized return for non-payers (3.95%).
PepsiCo
This top consumer staples company reported surprisingly solid second-quarter earnings, but its stock is still down almost 5% in 2025. PepsiCo Inc. (NYSE: PEP | PEP Price Prediction) is a worldwide food and beverage company.
Its Frito-Lay North America segment offers:
- Lays and Ruffles potato chips
- Doritos, Tostitos, and Santitas tortilla chips
- Cheetos cheese-flavored snacks, branded dips
- Fritos corn chips
The company’s Quaker Foods North America segment provides:
- Quaker Oatmeal
- Grits
- Rice cakes
- Natural granola and oat squares
- Pearl Milling mixes and syrups
- Quaker Chewy granola bars
- Cap’n Crunch cereal
- Life cereal
- Rice-A-Roni side dishes
PepsiCo’s North America Beverages segment offers beverage concentrates, fountain syrups, and finished goods under these brands:
- Pepsi
- Gatorade
- Mountain Dew
- Diet Pepsi
- Aquafina
- Diet Mountain Dew
- Tropicana Pure Premium
- Sierra Mist
- Mug
Citigroup has a Buy rating with a $168 target price.
Pfizer
Pfizer Inc. (NYSE: PFE) was established in 1849 in New York by two German entrepreneurs. This top pharmaceutical stock was a massive winner in the COVID-19 vaccine sweepstakes but has been crushed over the last two years, as many people have not received boosters, and is down almost 5% in 2025. Pfizer discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It pays a dependable dividend, which has risen yearly for the last 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, and 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
Pfizer anticipates full-year 2025 revenues in the range of $61.0 to $64.0 billion. This includes the expectation that revenues from COVID-19 products in 2025 will be broadly consistent with those in 2024, after excluding approximately $1.2 billion of non-recurring revenue for Paxlovid in 2024.
Jefferies has a Buy rating with a $33 target price.
Stanley Black & Decker
Stanley Black & Decker Inc. (NYSE: SWK) is the world’s largest tool company, with 50 manufacturing facilities in the United States and more than 100 worldwide. With the potential for the economy to slow down somewhat, you can bet that the do-it-yourself legions will fix rather than buy new, and this legendary stock is a solid idea now, especially down almost 17% in 2025. Stanley Black & Decker provides hand tools, power tools, outdoor products, and related accessories in the United States, Canada, Other Americas, Europe, and Asia.
Its Tools & Outdoor segment offers professional-grade corded and cordless electric power tools and equipment, including:
- Drills
- Impact wrenches and drivers
- Grinders, saws, routers, and sanders
- Pneumatic tools and fasteners, such as nail guns, nails, staplers and staples, and concrete and masonry anchors; corded and cordless electric power tools
- Hand-held vacuums, paint tools, and cleaning appliances
- Leveling and layout tools, planes, hammers, demolition tools, clamps, vises, knives, saws, chisels, and industrial and automotive tools
- Drill, screwdriver, router bits, abrasives, saw blades, and threading products
- Toolboxes, sawhorses, medical cabinets, and engineered storage solutions
- Electric and gas-powered lawn and garden products
This segment sells its products under these brand names:
- DeWalt
- Craftsman
- Cub Cadet
- Black+Decker
- Hustler
The company’s Industrial segment provides:
- Threaded fasteners, blind rivets and tools, blind inserts and tools
- Drawn arc weld studs and systems
- Engineered plastic and mechanical fasteners
- Self-piercing riveting systems
- Precision nut running systems
- Micro fasteners
- High-strength structural fasteners
- Axle swage, latches, heat shields, pins, couplings, fittings, and other engineered products
- Attachments used on excavators and handheld tools
This segment sells its products through a direct sales force and third-party distributors to the automotive, manufacturing, electronics, construction, aerospace, and other industries.
UBS has a Buy rating and a target price of $100.
Target
Target Corp. (NYSE: TGT) is an American retail corporation with a chain of discount department stores and hypermarkets. This company remains a solid and safe retail total return play, and after a rough first half of 2025, down almost 23%, it is a stellar buy. Target is a general merchandise retailer in the United States. It offers apparel for women, men, boys, girls, toddlers, infants, and newborns, as well as jewelry, accessories, and shoes. The company also offers a range of beauty and personal care products, baby gear, cleaning supplies, paper products, and pet care products.
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. It also 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 severe as the beer giants’ conundrum, it was a significant negative that has seemingly subsided.
Guggenheim has a Buy rating, accompanied by a $115 target.
UPS
The delivery giant announced that it is cutting its shipping volume for Amazon.com Inc. (NASDAQ: AMZN) by more than 50% by the second half of 2026, and that news has driven shares down by over 18% in 2025. The company said the move is part of a broader strategy by UPS to focus on more profitable and less risky business segments. United Parcel Service Inc. (NYSE: UPS) provides a range of integrated logistics solutions for customers in more than 200 countries and territories.
Its segments include:
- U.S. Domestic Package
- International Package
U.S. Domestic Package segment offers a range of United States domestic air and ground package transportation services. Its air portfolio offers time-definite, same-day, next-day, two-day, and three-day delivery alternatives as well as air cargo services.
UPS’s ground network enables customers to ship using its day-definite ground service. UPS SurePost provides residential ground service for customers with non-urgent, lightweight residential shipments.
The International Package segment comprises its small package operations in Europe, the Indian subcontinent, the Middle East and Africa, Canada, Latin America, and Asia. It offers a selection of guaranteed day- and time-definite international shipping services. Its supply chain solutions encompass forwarding, logistics, and other related businesses.
Citigroup has a Buy rating with a $127 target price.
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