In this article, we will be looking at the 10 best safe blue chip dividend stocks. If you want to skip our detailed analysis of blue chips stocks and dividend investing, you can go directly to the 5 Best Safe Blue Chip Dividend Stocks.
If you’re looking for a stock that’s reliable, renowned, and reputable, then blue-chip stocks are some of the best options out there that you can look into. A blue-chip stock is by definition a stock of a well-established a financially stable company with a significantly large market capitalization. Popular names in this category include McDonald’s Corporation (NYSE: MCD), Target Corporation (NYSE: TGT), PepsiCo, Inc. (NASDAQ: PEP), and The Procter & Gamble Company (NYSE: PG).
Typically, blue-chip stocks have remained popular among investors, as we also saw this year when JP Morgan analysts commented in April that the S&P 600 Small Cap Index fell by about 5%, while the S&P’s large-cap stocks like Microsoft Corporation (NASDAQ: MSFT) set record highs that month, allowing large-cap stocks to rise by about 4%. Analysts attributed these developments to day traders settling in the comfort and familiarity of traditional blue-chip giants in favor of Reddit-approved meme stocks. VandaTrack’s Giacomo Pierantoni, for instance, commented that older investors of around 50 years in age may be the ones responsible for the resurging popularity of blue-chip stocks, showing a generation with some significant buying power is beginning to give these stocks more attention yet again.
The above isn’t surprising, given that most investors would prefer a degree of guaranteed stability in their investments. As such, blue-chip stocks that also pay stable dividends are considered good investment opportunities. Dividend investing on its own is already a favored investment strategy. Dividend stocks have been outperforming the stock market at large for a consistent time period, with this reality not having changed with the outbreak of the pandemic. For instance, the DVY iShares dividend ETF containing a number of blue-chip dividend stocks like Exxon Mobil Corporation (NYSE: XOM) gained over 1% this May and 2.5% for the whole year, while the US 10 year yield dropped below 1.6%.
Investing is becoming 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 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. 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 safe blue chip dividend stocks. The stocks added to our list below were selected on the basis of hedge fund popularity, analysts’ ratings, fundamentals, and growth potential based on core business strengths.
We also took care to ensure each stock added to the list had increased its dividend yield for at least the past 20 years or more, as a metric to determine the stability of the stock’s dividend.
We have also mentioned the number of years of consistent dividend hikes with each of these stocks.
Best Safe Blue Chip Dividend Stocks
10. Northwest Natural Holding Company (NYSE: NWN)
Number of Hedge Fund Holders: 10
Number of Years of Consistent Dividend Growth: 65
Dividend Yield: 3.68%
Northwest Natural Holding Company (NYSE: NWN) is a utility company, primarily operating in the gas utility industry through its subsidiary company, Northwest Natural Gas Company. It ranks 10th on our list of the best safe blue chip dividend stocks.
This February, Northwest Natural Holding Company (NYSE: NWN) offered EPS guidance for the financial year of 2021, expecting $2.40 to $2.60 in EPS, versus consensus estimates of $2.54. The company has since reaffirmed this EPS view in May. In the same month, the stock’s price target was also raised to $58 by Wells Fargo, which holds an Equal Weight rating on Northwest Natural Holding Company (NYSE: NWN) shares.
In the first quarter of 2021, Northwest Natural Holding Company (NYSE: NWN) had an EPS of $1.94, beating estimates by $0.12. The company’s $315.95 million revenue was up 10.8% year over year and significantly outperformed the previous quarter’s $260.27 million revenue. Northwest Natural Holding Company (NYSE: NWN) has also gained about 16.66% in the past 6 months and 14.24% year to date.
By the end of the first quarter of 2021, 10 hedge funds out of the 866 tracked by Insider Monkey held stakes in Northwest Natural Holding Company (NYSE: NWN) worth roughly $28.3 million. This is compared to 10 hedge funds in the previous quarter with stakes worth about $25.4 million.
Like Target Corporation (NYSE: TGT), McDonald’s Corporation (NYSE: MCD), PepsiCo, Inc. (NASDAQ: PEP), and The Procter & Gamble Company, Northwest Natural Holding Company (NYSE: NWN) is a good blue-chip stock to buy.
9. Walgreens Boots Alliance, Inc. (NASDAQ: WBA)
Number of Hedge Fund Holders: 41
Number of Years of Consistent Dividend Growth: 46
Dividend Yield: 3.99%
Walgreens Boots Alliance, Inc. (NASDAQ: WBA) is a pharmacy-led health and beauty retail company operating in the consumer staples sector. It ranks 9th on our list of the best safe blue chip dividend stocks.
This July, Baird retained its Outperform rating on Walgreens Boots Alliance, Inc. (NASDAQ: WBA) shares, while Barclays has kept its Equal Weight rating on the stock as well.
In the fiscal third quarter of 2021, Walgreens Boots Alliance, Inc. (NASDAQ: WBA) had an EPS of $1.38, beating estimates by $0.23. The company’s revenue was $34.03 billion, also beating estimates by $526.60 million. Walgreens Boots Alliance, Inc. (NASDAQ: WBA) has gained 15.24% in the past year.
By the end of the first quarter of 2021, 41 hedge funds out of the 866 tracked by Insider Monkey held stakes in Walgreens Boots Alliance, Inc. (NASDAQ: WBA) worth roughly $1.13 billion. This is compared to 36 hedge funds in the previous quarter with stakes worth about $609 million.
Like Target Corporation (NYSE: TGT), McDonald’s Corporation (NYSE: MCD), PepsiCo, Inc. (NASDAQ: PEP), and The Procter & Gamble Company, Walgreens Boots Alliance, Inc. (NASDAQ: WBA) is a good blue-chip stock to buy.
Ariel Investments, an investment management firm, mentioned Walgreens Boots Alliance, Inc. (NASDAQ: WBA) in its fourth-quarter 202 investor letter. Here’s what they said:
“Walgreens Boots Alliance, Inc. has been essentially flat during our brief holding period. We have successfully owned Walgreens in the past. Recently, its share price has been pressured on concerns that Amazon may enter the prescription drug distribution business. As recently as 2015, Walgreens was a market favorite, trading at more than 20 times forward earnings. The company was expected to grow in good times and bad. Walgreens’ new clinics, designed to treat day-to-day healthcare needs such as flu shots and children’s ear infections, could be part of the solution for expensive emergency room overcrowding. Finally, trends toward generic pharmaceutics that began in 2015 are still considered a positive, as pharmacies have more influence in directing customers toward particular generics than with a patient seeking a patented drug prescribed by a doctor. Walgreens will face new competition going forward, but with its current depressed valuation, we believe the threats are more than discounted in an attractive stock price.”
8. Chevron Corporation (NYSE: CVX)
Number of Hedge Fund Holders: 41
Number of Years of Consistent Dividend Growth: 34
Dividend Yield: 5.26%
Chevron Corporation (NYSE: CVX) is an energy company operating in the integrated oil and gas industry through its subsidiaries. The company functions globally and also works in cash management and debt financing, insurance, real estate, and technology businesses. It ranks 8th on our list of the best safe blue chip dividend stocks.
This July, BMO Capital initiated coverage of Chevron Corporation (NYSE: CVX) with an Outperform rating and a $123 price target, indicating a 25% upside on the shares. Analyst Phillip Jungwirth made optimistic comments on the company’s “solid” free cash flow and low dividend breakeven, which he believes will improve in the future.
In the first quarter of 2021, Chevron Corporation (NYSE: CVX) had an EPS of $0.90, surpassing the previous quarter’s EPS of -$0.01, while its revenue was $32.03 billion, up 1.68% year over year and also significantly better than the previous quarter’s revenue of $25.25 billion. Chevron Corporation (NYSE: CVX) has gained about 10.73% in the past 6 months and 20.38% year to date as well.
By the end of the first quarter of 2021, 41 hedge funds out of the 866 tracked by Insider Monkey held stakes in Chevron Corporation (NYSE: CVX) worth roughly $4.86 billion. This is compared to 50 hedge funds in the previous quarter with stakes worth about $5.39 billion.
Like Target Corporation (NYSE: TGT), McDonald’s Corporation (NYSE: MCD), PepsiCo, Inc. (NASDAQ: PEP), and The Procter & Gamble Company, Chevron Corporation (NYSE: CVX) is a good blue-chip stock to buy.
ClearBridge Investments, an investment management firm, mentioned Chevron Corporation (NYSE: CVX) in its first-quarter 2021 investor letter. Here’s what they said:
“While reducing in health care and consumer staples, we increased our exposure to high-quality names in economically sensitive areas of the market. We added to low-cost, high-quality energy names, (including) Chevron. We are positive on the company’s strong balance sheets, competitive positions and exposure to an economic recovery.”
7. Target Corporation (NYSE: TGT)
Number of Hedge Fund Holders: 60
Number of Years of Consistent Dividend Growth: 53
Dividend Yield: 1.42%
Target Corporation (NYSE: TGT) is a general merchandise retailer operating in the consumer discretionary sector to provide a range of products such as food, assortments, apparel, accessories, and others to customers in the US. The company ranks 7th on our list of the best safe blue chip dividend stocks.
This June, Argus analyst Christopher Graja reiterated his Buy rating on Target Corporation (NYSE: TGT) shares while also raising his price target from $250 to $265. Graja made positive comments on the company’s dividend hike of about 32%, while also boosting his EPS view for Target Corporation (NYSE: TGT) for the financial year of 2021 to $11.70.
In the fiscal first quarter of 2022, Target Corporation (NYSE: TGT) had an EPS of $3.69, beating estimates by $1.46. The company’s revenue was $24.20 billion, up 23.36% year over year and also beating estimates by $2.18 billion. Target Corporation (NYSE: TGT) has gained about 30.20% in the past 6 months and 42.79% year to date.
By the end of the first quarter of 2021, 60 hedge funds out of the 866 tracked by Insider Monkey held stakes in Target Corporation (NYSE: TGT) worth roughly $4.76 billion. This is compared to 78 hedge funds in the previous quarter with stakes worth about $4.06 billion.
Like McDonald’s Corporation (NYSE: MCD), PepsiCo, Inc. (NASDAQ: PEP), and The Procter & Gamble Company, Target Corporation (NYSE: TGT) is a good blue-chip stock to buy.
LRT Capital Management, an investment management firm, mentioned Target Corporation (NYSE: TGT) in its first-quarter 2021 investor letter. Here’s what they said:
“Target, the Minneapolis-based retailer, continues to fire on all cylinders as the company has reported two quarters in a row of +20% revenue growth (5% traffic growth + 15% average basket size6 ), coupled with the strongest EBITDA margins in over four years. The company has successfully navigated the Covid-19 pandemic with online sales growing by 155% and 118% during Q3 2020 and Q4, respectively.
On March 2nd, the company reported another stellar quarter, with same-store sales growing by over 20%, and both earnings (+57% YoY) and revenues (+21% YoY) beating estimates. The shares are up 14.11% year-to-date. We believe the shares are a bargain 23x trailing and 20x forward earnings.”
6. PepsiCo, Inc. (NASDAQ: PEP)
Number of Hedge Fund Holders: 61
Number of Years of Consistent Dividend Growth: 49
Dividend Yield: 2.78%
PepsiCo, Inc. (NASDAQ: PEP) is a food and beverage company operating across the globe, owning brands such as Cheetos, Doritos, Lay’s, Aquafina, and a range of others. It ranks 6th on our list of the best safe blue chip dividend stocks.
This July, Wells Fargo retained its Equal Weight rating on PepsiCo, Inc. (NASDAQ: PEP) shares, while raising its price target on the stock from $147 to $160. Analyst Chris Carey has commented that the company’s results in the second quarter far exceeding all expectations, hence he believes that PepsiCo, Inc. (NASDAQ: PEP) can also deliver on its raised outlook for the year.
In the second quarter of 2021, PepsiCo, Inc. (NASDAQ: PEP) had an EPS of $1.71, beating estimates by $0.17. The company’s revenue was $19.22 billion, up 20.52% year over year and also beating estimates by about $1.27 billion. PepsiCo, Inc. (NASDAQ: PEP) has gained 9.30% in the past 6 months and 7.12% year to date.
By the end of the first quarter of 2021, 61 hedge funds out of the 866 tracked by Insider Monkey held stakes in PepsiCo, Inc. (NASDAQ: PEP) worth roughly $4.88 billion. This is compared to 56 hedge funds in the previous quarter with stakes worth about $4.28 billion.
Like Target Corporation (NYSE: TGT), McDonald’s Corporation (NYSE: MCD), and The Procter & Gamble Company, PepsiCo, Inc. (NASDAQ: PEP) is a good blue-chip stock to buy.
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Disclosure: None. 10 Best Safe Blue Chip Dividend Stocks is originally published on Insider Monkey.
