In this article, we will be taking a look at the 10 best blue chip dividend stocks. To skip our detailed analysis of dividend investing, you can go directly to see the 5 Best Blue Chip Dividend Stocks.
Although no stock can ensure complete stability, blue chip stocks are among the few that can offer investors the closest best alternative. According to Forbes, these stocks have five main markers: longevity, reliability, market capitalization, name recognition, and perhaps most importantly, dividends. Because of their past performance demonstrating survival through recessions and market downturns, and smooth records of good earnings, blue chip stocks are generally considered reliable investments.
Track records of some blue chip stocks can cement the above points. For instance, Microsoft Corporation (NASDAQ:MSFT) had a 10-year trailing return of 29.48% this November, and the company also made dividend payments to its shareholders of $0.56 per share just this August. If you take Apple Inc. (NASDAQ:AAPL), we see a 10-year trailing return of 27% and dividend payments of $0.22 per share as of this November. Johnson & Johnson (NYSE:JNJ), has a 10-year trailing return of 13.61% as of this November and paid $1.06 per share in dividends up till this August.
The list will go on the longer we look into blue chip dividend stocks, but the point remains the same: these stocks, like Walmart Inc. (NYSE:WMT), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT), are among the best investment options for those seeking income and stability. As such, we have seen this year a growing interest in blue chip stocks, as mentioned by Bloomberg. Retail day traders have been noted to be piling into these stocks as of this April, with analysts from JPMorgan and VandaTrack using this trend to explain the decreasing popularity of small-cap stocks. As of this April, the S&P’s large-cap benchmark has risen nearly 4% from the March 12 record, while the S&P 600 small-cap index fell almost 5%.
Investing has become difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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Without further ado, let’s take a look at the 10 best blue chip dividend stocks.
Our Methodology
Insider Monkey tracks the data of about 873 hedge funds, and we have used this data to pick blue chip dividend stocks that are highly popular among hedge funds today. For each stock we have mentioned its yield and the number of hedge funds holding a stake in it.
Best Blue Chip Dividend Stocks
10. Illinois Tool Works Inc. (NYSE:ITW)
Number of Hedge Fund Holders: 45
Dividend Yield: 2.1%
Illinois Tool Works Inc. (NYSE:ITW) is an industrials company and among the best blue chip dividend stocks. It sells industrial products and equipment and operates through its Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products segments.
In October, Wells Fargo initiated coverage of Illinois Tool Works Inc. (NYSE:ITW) shares with an Equal Weight rating. The firm also holds a $219 price target on the stock.
In the third quarter of 2021, Illinois Tool Works Inc. (NYSE:ITW) had an EPS of $1.96. The company’s revenue was $3.56 billion, up 7.53% year over year. Illinois Tool Works Inc. (NYSE:ITW) has gained 0.04% in the past six months and 17.46% year to date.
By the end of the second quarter of 2021, 45 hedge funds out of the 873 tracked by Insider Monkey held stakes in Illinois Tool Works Inc. (NYSE:ITW) worth roughly $657 million. This is compared to 33 hedge funds in the previous quarter with a total stake value of approximately $411 million.
Like Walmart Inc. (NYSE:WMT), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT), Illinois Tool Works Inc. (NYSE:ITW) is a good blue chip stock to invest in.
9. Cincinnati Financial Corporation (NASDAQ:CINF)
Number of Hedge Fund Holders: 22
Dividend Yield: 2.1%
Cincinnati Financial Corporation (NASDAQ:CINF) is an insurance company known to be among the best blue chip dividend stocks. It offers property and casualty insurance, and primarily deals through The Cincinnati Insurance Company, The Cincinnati Indemnity Company, and the Cincinnati Casualty Company..
Insider Monkey’s second quarter hedge fund data shows that 22 hedge funds held stakes in the company in the second quarter, worth $780 million. In comparison 22 hedge funds also held stakes in Cincinnati Financial Corporation (NASDAQ:CINF) in the previous quarter, worth $886 million.
8. Emerson Electric Co. (NYSE:EMR)
Number of Hedge Fund Holders: 45
Dividend Yield: 2.1%
Emerson Electric Co. (NYSE:EMR) is a manufacturing company based in the US. This Fortune 500 company is one of the best blue chip dividend stocks out there, and manufactures products and offers engineering services for the industrial, commercial, and consumer markets.
Markus Mittermaier, an analyst at UBS, holds a Buy rating on shares of Emerson Electric Co. (NYSE:EMR) as of this October. The analyst also placed a $113 price target on the stock.
Out of 873, 45 hedge funds held stakes in Emerson Electric Co. (NYSE:EMR) in the second quarter. The total value of their stakes was $854 million. Comparatively, 45 hedge funds again held stakes in the company in the first quarter, with a total stake value of $796 million.
7. Colgate-Palmolive Company (NYSE:CL)
Number of Hedge Fund Holders: 48
Dividend Yield: 2.3%
Colgate-Palmolive Company (NYSE:CL), a US-based MNC, is a consumer products company specializing in producing and distributing household, healthcare, and personal care products. The company is among the best blue chip dividend stocks.
Berenberg’s Fulvio Cazzol holds a Hold rating on shares of Colgate-Palmolive Company (NYSE:CL), alongside a price target of $77, as of this November.
Colgate-Palmolive Company’s (NYSE:CL) third quarter report shows an EPS of $0.81, beating estimates by $0.01. The company’s revenue was $4.41 billion, up 6.28% year over year and beating estimates by $15.45 million.
According to our data, 58 hedge funds held stakes in Colgate-Palmolive Company (NYSE:CL) in the second quarter. In comparison, 48 hedge funds held stakes in the company in the previous quarter. The total stake values were $2.4 billion and $2.3 billion respectively.
6. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 68
Dividend Yield: 2.4%
The Procter & Gamble Company (NYSE:PG) is a consumer staples company based in the US with headquarters in Ohio. The company was founded in 1837, and has since then become one of the best blue chip dividend stocks out there.
Deutsche Bank analyst Steve Powers holds a Buy rating on shares of The Procter & Gamble Company (NYSE:PG) as of this October. The analyst also holds a price target of $160 on the stock, as of the same time.
The earnings report for The Procter & Gamble Company (NYSE:PG) for the fiscal first quarter of 2022 shows an EPS of $1.61, beating estimates by $0.02. The company’s revenue was $20.34 billion, up 5.28% year over year and beating estimates by $445.19 million. The Procter & Gamble Company (NYSE:PG) has also gained 6.2% in the past six months and 6.34% year to date.
Our data on 873 hedge funds shows that in the second quarter of 2021, 68 hedge funds held stakes in The Procter & Gamble Company (NYSE:PG), worth approximately $6.9 billion. In comparison, 70 hedge funds held stakes in the company in the previous quarter, worth about $8.5 billion.
Like Walmart Inc. (NYSE:WMT), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT), The Procter & Gamble Company (NYSE:PG) is a blue chip stock worth investing in.
Click to continue reading and see 5 Best Blue Chip Dividend Stocks.
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Disclosure: None. 10 Best Blue Chip Dividend Stocks is originally published on Insider Monkey.
