Blue-chip stocks are among the most stable and safest investments available today. However, among blue-chip giants, a select few companies excel in promoting their financial growth and pay consistent, hefty dividends to investors. Growth and dividend investors couldn’t be happier owning shares of these three stocks.
These three dividend stocks represent the best picks for investors looking to take advantage of the stability of blue-chip stocks and enjoy excellent dividend payouts for many years to come. Through wise investments and acquisitions, these companies have continued to stay on top of their respective industries, and you don’t want to miss out.
The three blue-chip dividend stocks below have a long history of generous dividend payouts. Read on to learn how their financial performance and stability translate into success and outsized returns for investors.
Target (TGT)
Target (NYSE:TGT) is one of the most successful retailers in the United States. Although it has seen some volatility in the past few years after significantly investing in improving its customer experience and store presence throughout America, this has turned some investors off. Make no mistake: Target is still one of the best blue-chip dividend stocks to own.
While the most recent earnings report showed a slight decline in sales compared to the previous quarter, Target’s long-term performance demonstrates consistent growth. Year over year, Target’s operating margins remained intact despite its spending on large-scale optimization.
However, this success is not limited to Target’s historical margins and revenue. What makes Target so appealing to many dividend investors is its more than 50-year history of consistently growing dividend payouts. In the last five years alone, Target has increased its dividend by around 10% annually.
The retailer’s dividend yield hovers around 3% with a payout ratio of around 50%. Given its extraordinary payout potential and consistent growth, Target trades at a bargain price at a forward price-to-earnings ratio of just under 19%.
Realty Income (O)
Real estate investment trusts (REITs) are popular among dividend investors because they have a relatively high dividend payout. Realty Income (NYSE:O) stands out as a top dividend stock even among REITs. After its most recent quarterly dividend, Realty Income successfully increased its payout for almost 30 years.
With a dividend of 26.25 cents per share, the REIT successfully maintains a dividend yield of more than 6%. Much of its real estate is resilient to economic headwinds, making Realty Income attractive to growth investors who value long-term stability.
With 15,485 commercial real estate properties, Realty Income invested almost $600 million in the most recent quarter. Part of this massive boost in real estate came from the exciting acquisition of Spirit Realty Capital in January.
Realty Income’s portfolio mainly consists of real estate with predictable, stable income, such as convenience, grocery and drug stores. The occupancy rate of the REIT’s properties is also much higher than the average for the industry at just over 98%.
There is no denying the dividend potential that comes with this consistent, monstrous stock, and there’s no better time to buy than now as the price is lower than the historical average.
Visa (V)
Visa (NYSE:V) is a monster blue-chip dividend stock in the fintech industry. It has enjoyed many years of consistent growth and excellent dividend payouts for loyal investors. Visa has over 200 countries that utilize its payment technology and is at the head of the worldwide transition to digital payments.
In Visa’s fiscal second quarter, the payments processor reported revenue of almost $9 billion, showing an increase of 10% year over year. The company also reported a healthy 12% increase in GAAP earnings per share.
Visa shares its success with investors and has consistently increased its dividend for many years. Although the company has a dividend yield of just 0.75%, its track record of consistently raising the payout offsets the starting payment. Visa also shows no sign of losing momentum, translating its continued success into consistently increasing dividend payouts.
While Visa is not the cheapest stock, there’s no denying its dividend potential for many years to come. Given its dominant hold in a very relevant industry, this blue-chip dividend stock is a buy.
On the date of publication, Joel Lim did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
