Passive Income Powerhouses: 7 Blue-Chip Stocks to Own Now
If you can identify the right passive income blue-chip stocks, you will be able to enjoy steady income each quarter, and some companies have been rewarding investors for decades.
Wouldn’t it be nice to enjoy passive income frequently while your original investment continues to grow? Building wealth is a long-term process and while it can be your destination, the journey should be well-planned.
One way to achieve your goal is through dividend investing. Getting paid regularly and reinvesting this amount can help build wealth over time.
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No matter what, they continue with their dividend payments. Look for companies that have a solid history, steady dividend growth, and a competitive valuation. If you are looking for solid, passive income blue-chip stocks to invest in, here are my top picks for you.
Johnson & Johnson (JNJ)
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Global healthcare giant, Johnson & Johnson (NYSE:JNJ) is one of the best businesses to invest in. The company is growing because of its massive umbrella of products across diverse industries. Its innovative medicine and Medtech segment is growing at a rapid pace and continues to drive revenue.
The company also makes acquisitions to expand its portfolio. With a dividend yield of 3.04%, JNJ is one of the most resilient stocks to own. In the recent quarterly results, the revenue came in at $21.40 billion, and the EPS stood at $2.29.
Out of this, the medical devices business saw a 13% jump and generated $7.67 billion while the pharmaceutical segment saw a 4% jump and contributed $13.73 billion.
This is one company that believes in rewarding shareholders and has paid dividends for over 50 years. Trading at $156, the stock is down 9% over the past six months and worth buying at a discount.
3M (MMM)
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Despite a slowdown in growth, 3M’s (NYSE:MMM) valuation and a dividend yield of 6.48% make it a solid buy. The guidance for 2024 hasn’t been impressive, but I do not think we should write off the stock just yet.
It has a powerful presence across multiple industries and offers products that will always stay in demand.
To handle the challenges, the company has made multi-billion dollar acquisitions and has also restructured the business to reduce the segments from five to now four. It later announced job cuts and took more restructuring decisions to reduce the costs.
The company is down on full-year guidance, and this has impacted the stock. It means you can buy the stock while it is trading near a 52-week low of $93. While the stock might not see an upside soon, it is worth holding on to for the steady dividend income and the high payouts.
NextEra Energy (NEE)
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NextEra Energy (NYSE:NEE) is a company that benefits from the transition towards renewable energy. It is a utilities and renewable energy business that has offered strong dividends to shareholders. Most of its revenue comes from the utility business, which is also the largest utility company in the U.S.
While the renewable energy segment isn’t growing as it should, I think the worst is over. The fourth quarter results showed a strong improvement in the utilities business. NextEra Energy beat estimates in the fourth quarter results, and the bottom line was up by 2% because of the growth in utilities business.
Its operating revenue stood at $6.87 billion, and the total revenue stood at $28.1 billion, up 34%. While the numbers are impressive, the stock is down 23% in the past year and is trading for $56. Buying it in a dip could help enjoy significant gains as the energy sector improves. The company has a dividend yield of 3.32%, and has enough cash to keep rewarding shareholders for years to come.
McDonald’s (MCD)
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Burger giant McDonald’s (NYSE:MCD) enjoyed an excellent 2023, and it showed strength in high inflation periods.
As one of the biggest names in the industry and a global presence, McDonald’s is one business that will not disappoint in the years to come.
It is on an expansion spree and is taking steps to ensure high customer satisfaction through loyalty programs. It aims to open 10,000 stores globally by 2027. The company has a franchise business which helps make the most of the growing number of MCD outlets. It generates revenue from the franchises while keeping the operating costs down.
MCD stock isn’t cheap and is trading at $291, but it is worth an addition to your portfolio. This is one stock that will continue to thrive, no matter the market situation. It enjoys a dividend yield of 2.29% and has been paying dividends for the past 35 years. MCD is one stock to buy and hold for the long term.
Enterprise Products Partners (EPD)
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With a dividend yield of 7.85%, Enterprise Products Partners (NYSE:EPD) can be an excellent addition to your portfolio.
For a stock trading at $26, a dividend yield over 7% is a strong buy. The company operates in the energy industry and owns several assets that continue to generate revenue for it.
Enterprise Products Partners charges fees for the use of its infrastructure assets and this produces reliable cash flow year after year. This is how it continues to reward the shareholders. Even during peak periods, the company sees demand for its midstream assets.
It has increased the dividend payouts for 25 consecutive years and has a solid balance sheet which ensures steady rewards for shareholders.
The company has invested billions into capital projects that will support growth in the coming years, and the stock looks undervalued to me. If you are looking for steady dividend income from a safe stock, consider EDP.
Procter & Gamble (PG)
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One of the largest consumer staple companies in the world, Procter & Gamble (NYSE:PG) is a dividend aristocrat that has raised dividends for the past 67 years. It enjoys a dividend yield of 2.37% and has an annual payout of $3.76.
This is one stable stock to add to your portfolio and it will generate steady income for you. In the recent quarterly results, the company saw a 3% YOY rise in sales and this was despite the price hikes.
It also suffered because of the high inflationary period and this led to a flat volume. The company is aiming for an organic sales growth of 4% to 5% in the year.
I believe the business is solid, and it has a range of brands under its umbrella which continue to generate revenue. At the 52-week high, the stock is exchanging hands for $158 but is a long-term buy and hold.
Caterpillar (CAT)
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Caterpillar (NYSE:CAT) makes massive machines that are used in the construction and mining industry. While the business is steady, it can become cyclical.
However, the company’s fourth-quarter results were impressive, and it beat expectations.
Its revenue came in at $17.07 billion, and the EPS stood at $5.23. The company saw high sales and growing demand as inflation eased. It ended the year with a backlog of $27.5 billion, and management projected little revenue growth for the year.
CAT stock is trading for $322 and it isn’t cheap, but this is one stock that will boost your returns significantly. It is up 30% in the past year and 136% in the past five years. The company has a dividend yield of 1.61% and has 31 years of consistent dividend growth. A frontrunner in the industry, Caterpillar is one of the best in the business today.
On the date of publication, Vandita Jadeja did not hold (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.
Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.
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