Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.
A recent study from the Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the past half-century (1973-2023). Over the same timeline, this was more than double the annualized return for non-payers (3.95%).
Stocks and sectors go in and out of favor with investors for several reasons, but one thing that is mystifying to many is how solid blue-chip stocks, many of which have been category leaders for years, go out of favor. Many things can change a company’s trajectory, but when they are all but abandoned, especially blue-chip dividend leaders, that’s the time when investors can score big and buy passive income gems.
Most dividend investors seek solid passive income streams of quality dividend stocks. Passive income is a steady stream of unearned income that doesn’t require active traditional work. Shared ideas for earning passive income include investments, real estate, or side hustles.
We screened our 24/7 Wall St. blue-chip dividend research database, looking for top stocks that have been all but forgotten, pay shareholders dividends in a big way, and may be poised to bounce back, especially if the stock market takes a big leg down. Six top companies fit the bill perfectly, all rated Buy by top Wall Street firms.
3M
This top company could jump with a second-half economic pick-up. The shares have rallied over the last month and pay a solid 6.61% dividend. 3M Company (NYSE: MMM) is a diversified technology company worldwide.
It operates through four segments:
- Safety and Industrial
- Transportation and Electronics
- Health Care
- Consumer
The Safety and Industrial segment offers:
- ndustrial abrasives and finishing for metalworking applications
- Auto body repair solutions
- Closure systems for personal hygiene products
- Masking and packaging materials
- Electrical products and materials for construction and maintenance
- Power distribution and electrical original equipment manufacturers
- Structural adhesives and tapes
- Respiratory, hearing, eye, and fall protection solutions
- Natural and color-coated mineral granules for shingles
The 3M Transportation and Electronics segment provides:
- Ceramic solutions
- Attachment tapes
- Films, sound, and temperature management for vehicles
- Premium large-format graphic films for advertising and fleet signage
- Light management films and electronics assembly solutions
- Packaging and interconnection solutions
- Reflective signage for highway and vehicle safety
Italy, the company’s Healthcare segment offers:
- Food safety indicator solutions
- Healthcare procedure coding and reimbursement software
- Skin, wound care, and infection prevention products and solutions
- Dentistry and orthodontic solutions
- Filtration and purification systems
The Consumer segment provides:
- Consumer bandages
- Braces, supports, and consumer respirators;
- Cleaning products for the home
- Retail abrasives
- Paint accessories
- Car care DIY products
- Picture hanging
- Consumer air quality solutions
- Stationery products
AT&T
The legacy telecommunications company has been undergoing a lengthy restructuring while lowering its dividend, which still stands at 6.45%. AT&T, Inc. (NYSE: T) provides worldwide telecommunications, media, and technology services.
Its Communications segment offers wireless voice and data communications services.
AT&T sells through its company-owned stores, agents, and third-party retail stores:
- Handsets
- Wireless data cards
- Wireless computing devices
- Carrying cases
- Hands-free devices
AT&T also provides:
- Data
- Voice
- Security
- Cloud solutions
- Outsourcing
- Managed and professional services
- Customer premises equipment for multinational corporations, small and mid-sized businesses, and governmental and wholesale customers.
In addition, this segment offers residential customers broadband fiber and legacy telephony voice communication services.
It markets its communications services and products under :
- AT&T
- Cricket
- AT&T PREPAID
- AT&T Fiber
The company’s Latin America segment provides wireless services in Mexico and video services in Latin America. This segment markets its services and products under the AT&T and Unefon brands.
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