2022 Blue-Chip Dividend Stocks List | Yields Up To 8.3%

September 14, 2022September 14, 2022 BN 203 Views 0 Comments Blue-chip stocks, Dividend, Money

In poker, the blue chips have the highest value. We don’t like the idea of using poker analogies for investing. Investing should be far removed from gambling. With that said, the term “blue-chip stocks” has stuck for a select group of stocks….

So, what are blue-chip stocks?

Blue-chip stocks are established, safe, dividend payers. They are often market leaders and tend to have a long history of paying rising dividends. Blue-chip stocks tend to remain profitable even during recessions.

You may be wondering “how do I find blue-chip stocks?”

You can find blue-chip dividend stocks using the lists and spreadsheet below.

At Sure Dividend, we qualify blue-chip stocks as companies that are members of 1 or more of the following 3 lists:

Dividend Achievers (10+ years of rising dividends)
Dividend Aristocrats (25+ years of rising dividends)
Dividend Kings (50+ years of rising dividends)

Our top 7 best blue-chip stock list excludes MLPs and REITs. The table of contents below allows for easy navigation.

Our top 7 favorite blue-chip stocks are analyzed in detail below.

The 7 Best Blue-Chip Buys Today

The 7 best blue-chip stocks as ranked by 5-year expected annual returns from the Sure Analysis Research Database (excluding REITs and MLPs) are analyzed in detail below.

In this section, stocks were further screened for a satisfactory Dividend Risk score of ‘C’ or better.

Blue-Chip Stock #7: Sonoco Products (SON)

Dividend History: 40 years of consecutive increases
Dividend Yield: 3.0%
Expected Total Return: 16.3%

Sonoco Products provides packaging, industrial products and supply chain services to its customers. The markets that use the company’s products include those in the appliances, electronics, beverage, construction and food industries. Sonoco was founded in Hartsville, South Carolina in 1899 and introduced the first paper textile cone. The company generates about $7.2 billion in annual sales. Sonoco Products is now composed of 2 segments, Consumer Packaging and Industrial Packaging, with all other businesses listed as “all other”.

On July 21st, 2022, Sonoco Products reported second quarter earnings results for the period ending July 3rd, 2022. Revenue surged 38.4% to a company record $1.91 billion, which was in-line with analysts’ expectations. Adjusted earnings-per-share of $1.76 compared very favorably to $0.84 in the prior year and was $0.11 above estimates.

Consumer Packaging revenues grew 65.6% to a segment record $990.1 million, due once again in large part to the purchase of Ball Metalpack that closed in the fourth quarter of 2021. Higher selling prices also factored into results. Global rigid paper containers had slight volume growth outside of North America, where supply constraints limited business.

Flexible packaging volume grew 4%, but was offset by mix. Industrial Paper Packing sales grew 20% to a segment record $727.4 million as higher selling prices more than offset a small volume decline and currency exchange headwinds.

Sonoco Products raised its outlook for 2022 as well, with the company expecting adjusted earnings-per-share of $6.20 to $6.30 for the year, up from $5.25 to $5.45 and $4.60 to $4.80 previously. We expect 5% annual EPS growth through 2027. The stock has a 3% dividend yield, leading to total estimated returns of 16.3%.

Blue-Chip Stock #6: V.F. Corp. (VFC)

Dividend History: 49 years of consecutive increases
Dividend Yield: 4.5%
Expected Total Return: 16.4%

V.F. Corporation is one of the world’s largest apparel, footwear and accessories companies. The company’s brands include The North Face, Vans, Timberland and Dickies. The company, which has been in existence since 1899, generated over $11 billion in sales in the last 12 months.

In late July, V.F. Corp reported (7/28/22) financial results for the fiscal 2023 first quarter. Revenue of $2.26 billion rose 3.2% year over year and beat analyst estimates by $20 million. The North Face brand led the way with 37% currency-neutral revenue growth in the quarter.

However, inflation took its toll on margins and profits. Gross margin of 53.9% for the quarter declined 260 basis points, while operating margin of 2.8% declined 640 basis points. As a result, adjusted EPS declined 68% to $0.09 per share.

Adjusted earnings-per-share grew 67%, from $0.27 to $0.45, but missed analysts’ consensus by $0.02. For the new fiscal year, V.F. Corp expects revenue growth of at least 7% and adjusted earnings-per-share of $3.30 to $3.40.

We expect 7% annual EPS growth over the next five years. VFC stock also has a dividend yield of 4.5%. Annual returns from an expanding P/E multiple are estimated at ~4.9%, equaling total expected annual returns of 16.4% through 2027.

Blue-Chip Stock #5: Verizon Communications (VZ)

Dividend History: 16 years of consecutive increases
Dividend Yield: 6.1%
Expected Total Return: 17.4%

Verizon Communications was created by a merger between Bell Atlantic Corp and GTE Corp in June 2000. Verizon is one of the largest wireless carriers in the country. Wireless contributes three-quarters of all revenues, and broadband and cable services account for about a quarter of sales. The company’s network covers ~300 million people and 98% of the U.S.

On July 22, 2022, the company reported the fiscal year’s second-quarter and first six months results. Revenue was flat year over year (YoY) at $33.8 billion for the quarter compared to the second quarter in 2021. Earnings came in at $1.24 per share, a decrease of 11.4% compared to the $1.40 per share the company made in 2Q201.

The company had a net addition of 268,000, including 256,000 fixed wireless net additions. Total broadband net additions increased by 39,000 from first-quarter 2022, and fixed wireless net additions increased by 62,000 from first-quarter 2022.

The cash flow from operations was down for the year’s first half from $20.4 billion to $17.7 billion. While capital expenditures were up $2.4 billion to $10.5 billion in the first half. Thus, Free cash flow for the quarter was down from $11.7 billion to $7.2 billion for the first half of the year.

We expect annual returns of 17.4% over the next five years, consisting of 4% EPS growth, the 6.1% dividend yield, and a 7.3% return from an expanding P/E multiple.

Blue-Chip Stock #4: Qualcomm Inc. (QCOM)

Dividend History: 20 years of consecutive increases
Dividend Yield: 2.3%
Expected Total Return: 17.7%

Qualcomm develops and sells integrated circuits for use in voice and data communications. The chip maker receives
royalty payments for its patents used in devices that are on 3G and 4G networks. Qualcomm is a large-cap stock with a market cap above $140 billion and should generate sales of more than $44 billion this year.

On April 13th, 2022, Qualcomm increased its quarterly dividend 10.3% to $0.75, marking the company’s 20th consecutive year of dividend growth.

On July 27th, 2022, Qualcomm announced results for the third quarter of fiscal year 2022 for the period ending June 26th, 2022 (the company’s fiscal year ends September 30th, 2022). Revenue was higher by 37.3% to $10.9 billion, which was $50 million more than expected. Adjusted earnings-per-share of $2.96 compared very favorably to $1.92 in the previous year and was $0.09 ahead of estimates.

Qualcomm CDMA Technologies, or QCT, grew 45% to $9.4 billion.

Handsets, Internet of Things, RF frontend, and Automotive grew 59%, 31%, 9%, and 38%, respectively. Qualcomm Technology Licensing, or QTL, improved by 2% to $1.5 billion. Qualcomm repurchased four million shares at an average price of $125 during the quarter. Leadership forecasts adjusted earnings-per-share of $3.00 to $3.30 for the fourth quarter, compared to consensus of $3.25.

We expect annual returns of 17.7% per year for Qualcomm. This will be driven by 7% expected EPS growth, plus the 2.3% dividend yield and a sizable boost from an expanding P/E multiple.

Blue-Chip Stock #3: 3M Company (MMM)

Dividend History: 64 years of consecutive increases
Dividend Yield: 4.8%
Expected Total Return: 18.2%

3M sells more than 60,000 products that are used every day in homes, hospitals, office buildings and schools around the world. It has about 95,000employees and serves customers in more than 200 countries.

3M is now composed of four separate divisions. The Safety & Industrial division produces tapes, abrasives, adhesives and supply chain management software as well as manufactures personal protective gear and security products.

The Healthcare segment supplies medical and surgical products as well as drug delivery systems. Transportation & Electronics division produces fibers and circuits with a goal of using renewable energy sources while reducing costs. The Consumer division sells office supplies, home improvement products, protective materials and stationary supplies.

On July 26th, 2022, 3M reported second quarter earnings results for the period ending June 30th, 2022. Revenue decreased 2.8% to $8.7 billion, but was in-line with expectations. Adjusted earnings-per-share of $2.48 compared to $2.59 in the prior year, but was $0.04 above estimates. Organic growth for the quarter was 1% as a stronger U.S. dollar weighed.

The company also announced that it would be spinning off its Health Care segment into a standalone entity, which would have had $8.6 billion of revenue in 2021. The transaction is expected to close by the end of 2023.

3M provided an updated outlook for 2022, with the company now expecting adjusted earnings-per-share of $10.30 to $10.80 for the year, down from $10.75 to $11.25 previously.

Blue-Chip Stock #2: Comcast Corp. (CMCSA)

Dividend History: 14 years of consecutive increases
Dividend Yield: 3.0%
Expected Total Return: 18.7%

Comcast is a media, entertainment and communications company. Its business units include Cable Communications (High-Speed Internet, Video, Business Services, Voice, Advertising, Wireless), NBCUniversal (Cable Networks, Theme Parks, Broadcast TV, Filmed Entertainment), and Sky, a leading entertainment company in Europe that provides Video, High-speed internet, Voice, and Wireless Phone Services directly to consumers.

Comcast reported its Q2 2022 results on 07/28/22. For the quarter, the company’s revenues climbed 5.1% to $30.0 billion, adjusted EBITDA (a cash flow proxy) rose 10.1% to 9.8 billion, adjusted earnings-per-share (EPS) climbed 20.2% to $1.01, and it generated free cash flow (FCF) of $3,170 million.

Comcast has had 14 consecutive dividend increases. The fast dividend growth was possible through solid earnings growth and a safe dividend payout ratio. Its dividend is well-covered by earnings and cash flows. Comcast is one of the largest players in the entertainment industry. New market entrants would have to spend many billions of dollars to establish as a key cable player or entertainment network.

The cable industry is impacted by the nationwide cord-cutting trend, though, as some customers are ditching traditional pay-TV entirely. Comcast has so far been able to withstand this trend through growth from its other businesses.

Blue-Chip Stock #1: The Andersons Inc. (ANDE)

Dividend History: 26 years of consecutive increases
Dividend Yield: 2.0%
Expected Total Return: 20.2%

The Andersons, Inc. is an agriculture company that conducts business in North America. It operates through the following segments: Trade, Renewables, and Plant Nutrient. The Trade segment includes commodity merchandising and the operation of terminal grain elevator facilities. The trade segment contributed over 70% of the company’s revenue in 2021.

On August 2nd, 2022, The Andersons released its second-quarter 2022 results. For the quarter the company reported revenue of $4.45 billion, an increase of 37% versus year over year, and adjusted earnings per diluted share of $2.34, up 92% versus the first quarter of 2021. Plant Nutrient and Renewables had strong second quarter results and the Trade Group’s result improved significantly after a difficult first quarter. Trade Group reported pre-tax income of $23.7 million compared to $4.7 million in the previous.

With some reduction in commodity prices from Q1 highs, resulting from the conflict in Ukraine, the Trade segment now benefited from basis appreciation and good selling margins for many of its products. The Renewables segment nearly doubled last year’s already strong performance, showing good yields and higher crush margins in Andersons’ ethanol plants.

The Andersons has a modest growth ambition for the coming years. Management presented a “strategy for growth” plan with an adjusted EBITDA between $375 – $400 million in 2025.

The company has a long history of paying dividends and has increased its payout for 26 consecutive years. Shares currently yield 2.0%. Total returns are estimated at 20.2% per year.

Final Thoughts

Stocks with long histories of increasing dividends are often the best stocks to buy for long-term dividend growth and high total returns.

But just because a company has maintained a long track record of dividend increases, does not necessarily mean it will continue to do so in the future.

Investors need to individually assess a company’s fundamentals, particularly in times of economic distress.

These 7 blue-chip stocks have attractive dividend yields, and long histories of raising their dividends each year. They also have compelling valuations that make them attractive picks for investors interested in total returns.

JLBN