Most investors love income, no matter where it comes from. With inflation and uncertainty remaining high, it’s fair to assert that investors might love income more now than ever. That’s one of the many benefits of blue-chip dividend stocks. They provide dividend income that is reliable throughout the best and worst of times. Blue-chip firms boast steady records of strong performance that outlast economic cyclicality and stand the test of time.
What that means is that investors find dependability in these names, when it is generally difficult to find. The bonus here is that several of these companies not only pay income, but also have excellent growth potential. These firms aren’t the boring dividend stocks many have come to expect.
Qualcomm (QCOM)
Qualcomm (NASDAQ:QCOM) has thus far been a relatively unheralded stock in relation to its AI adoption.
Many other companies, particularly Nvidia, (NASDAQ:NVDA) have received the lion’s share of attention from investors. Their share prices have grown incredibly quickly as a result.
Qualcomm, however, has traded essentially flat in 2023. The chip maker is primarily known for its focus on mobile communications and is a noted supplier to the biggest firms in that space. Thus far, 2023 has been a troublesome year for the firm due to slowing demand. The outlook for mobile phone sales has remained bleak this year, as consumers are less willing to splash out on expensive handsets.
That explains why QCOM stock has been flat while overall markets have been strong. But there’s arguably a mismatch here, because Qualcomm’s snapdragon chips are AI-enabled and have strong potential beyond the hand phone market. The company is angling hard to sell into the Internet-of-Things markets and AI-automotive applications.
Thus, it’s perfectly reasonable to anticipate QCOM stock catching on soon. Buying in now provides that upside potential, along with a dividend yielding 2.7%, which isn’t bad.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is perhaps one of the last companies that might spring to mind when considering dividends. I imagine that many investors might not even recognize that it pays one. But it does. That dividend yields a relatively muted 0.8%, which is part of the reason it is so rarely talked about.
Nevertheless, Microsoft has been quietly paying that dividend on an uninterrupted and growing basis since 2003.
Microsft is currently testing all-time highs in terms of its price. Indeed, MSFT stock has been among the biggest beneficiaries of the AI boom. AI adoption has catalyzed its massive resurgence this year, promising revenue growth at an unprecendented rate, which is reason enough to believe that MSFT stock could eclipse its previous highs easily.
The 0.8% dividend Microsoft provides is a bit of enticement for more conservative investors to get behind that notion. Microsoft is only getting stronger given its investment into OpenAI and its Azure cloud business. The company’s ability to accurately predict and invest in the future of technology shouldn’t be ignored.
Apple (AAPL)
It’s no secret that Apple (NASDAQ:AAPL) has been able to establish its brand through its premium products. Whether it’s iPhones, MacBooks, or a whole host of other legacy products, Apple continues to sell everything it offers at the high end of the price spectrum. The company has brilliantly positioned those products.
That’s why investors should be especially interested as Apple unveils the Vision Pro. Apple is venturing into virtual reality, a new category for the firm. The tech giant has defined emerging tech categories in the past. VR headsets have found success within the gaming sector, but have had difficulty establishing much traction elsewhere. If Apple gets it right, revenues will surge when the headset is released early next year, given its $3,499 price tag.
Beyond this catalyst, Apple has proved to be arguably the strongest of the tech giants during 2022. It’s been resilient this year thus far, offering significant upside and a dividend yield of 0.5%.
Realty Income (O)
I’d argue that Realty Income (NYSE:O) is among the very best opportunities to grow investor capital in the real estate sector right now. The reason is simple. Realty Income offers exactly what its name says, a consistent source of income from the real estate sector. There’s also reason to believe that this income stream could grow investor capital more reliably than other REITs, due to is its track record.
The company owns and operates commercial real estate in long-term, net lease agreements. It operates real estate for many of the retailers like Walgreen’s (NYSE:WBA) and 7-Eleven, that will inevitably continue to operate, no matter the economic conditions. The company isn’t over-concentrated in troubled areas like commercial office buildings.
Instead, it remains focused on more stable operational sectors. Realty Income is a dividend aristocrat, meaning it is part of the S&P 500 and has increased its dividend consecutively for 25 years or more. It also pays that dividend on a monthly basis yielding 5.2% at the time of writing.
Kimberly-Clark (KMB)
Kimberly-Clark (NYSE:KMB) is the most boring company and stock on this list. I mention that because dividend investing can be ‘boring’ in that the sense that firms paying exciting dividend often operate relatively uninteresting businesses.
Kimberly-Clark sells tissue, paper products, diapers, and other non-durable consumer goods that probably don’t excite very many people. But like many other ‘boring’ blue-chip dividend-paying stocks, Kimberly-Clark is really good at what it does.
Huggies, Cottonele, Scott tissues, and other brands are household names within its suite of uninteresting products. That’s a recipe for dividend success. The company has established a household name for products that people don’t much think about. Then, the company uses those revenues to develop other boring products, quietly growing a massive company.
Currently, KMB stock pays 3.4% dividend yield. I think this company will almost certainly continue to grow that dividend, given that it has done so consistently since 1973.
Altria (MO)
Altria (NYSE:MO) is probably the single best stock on this list for pure income seekers. The stock certainly offers the highest yield, at 8.6%. At first blush, that very high yield raises alarm bells. It’s well above the traditional yield ranges that investors consider healthy and sustainable.
But I don’t believe there’s much to fear in this case. Altria isn’t a REIT engaging in risky real estate and enticing investors with a high dividend that is unreliable and subject to risk of collapse. Instead, it’s a big tobacco firm that finds itself pivoting into a more smoke-free future.
That future is likely to provide continued dividend growth, per Altria’s first quarter earnings report. That report included guidance pledging mid single-digit dividend increases through 2030.
Additionally, MO stock currently trades near its average for the past three years. Yet, analysts believe that MO stock should be worth roughly 15% more over the next 12-18 months.
Coca-Cola (KO)
Coca-Cola (NYSE:KO) shares provide income and stability, along with long-term growth potential as well. The company is well-known by investors for its long-running dividend that is backed by value champions like Warren Buffett and Charlie Munger.
Income is there. Stability is there, too. Notably, Coca-Cola hasn’t reduced its dividend since 1963. KO stock also provides stability in the form of a share price that simply reacts more slowly to news in either direction. That stability is measured by a Beta of 0.55, meaning share prices move at 55% of the speed of the overall market. In a period in which investors have become habituated to sharp swings in valuations, Coca-Cola offers a hedge against those rapid movements. Dividend income is great, but peace of mind is arguably better.
Further, Coca-Cola should continue to outperform as consumers continue to spend on its mini luxuries, despite overarching economic concerns. The company’s revenue increased by 5% in the first quarter. That’s a testament to the unwavering consumer demand consumers provide for one of the world’s biggest household brands.
On the date of publication, Alex Sirois 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.