7 Bountiful Blue-Chip Stocks to Buy for Income Lovers (2024)

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Blue-chip stocks to buy for income are somewhat on the back burner at the moment. The Fed is set to loosen interest rates in 2024. The cost of lending is thus set to decrease creating a powerful set of factors for growth shares. In turn, blue-chip shares, more noted for stability than growth, arguably have become less attractive.

Yet, blue-chip stocks rarely go out of style. It is never a bad idea to play defensively. If the economy continues to rebound, then an investment will continue to grow, albeit somewhat slower than one in growth oriented firms. If the economy slips up, then blue-chip stocks will really shine. Either way, investors are unlikely to regret investing.

Altria (MO)

7 Bountiful Blue-Chip Stocks to Buy for Income Lovers (1)

Source: viewimage / Shutterstock.com

I’m going to continue to sing the praises of Altria (NYSE:MO) stock into 2024. As blue-chip stocks to buy for income go, buying shares of Altria is very easy to justify. There are many metrics which point to the idea that MO shares are simply a great investment for those looking for income. Yes, Altria is and was a tobacco firm that has to pivot with the evolution of the industry. Growth isn’t as high as it once was but the industry is not dying.

Let’s start with the dividend because that’s going to be the main reason to invest in Altria. As I write this, MO shares are yielding 9.75%. Altria’s dividend payout ratio is currently 0.78 which is very much in line with where it has been over the past decade. That suggests that there is little reason to believe that Altria is in danger of slashing the dividend in the near future.

Altria’s P/E ratio is also very low at the moment. Investors aren’t as interested in cigarette stocks now as they once were because people simply smoke less. I’d argue that that’s an opportunity. Yes, revenues are declining but Altria is paying investors to stick with it as it figures out how to deliver nicotine based revenues in this new era.

NextEra Energy (NEE)

7 Bountiful Blue-Chip Stocks to Buy for Income Lovers (2)

Source: madamF / Shutterstock.com

NextEra Energy (NYSE:NEE) is one of the most balanced blue-chip stocks to buy for income available in the stock market. The company itself is well diversified and positioned to provide growth but also remains reliable at the same time.

Next era energy constitutes two businesses: one, the largest electric utility firm, Florida Power & Light, and the other, NextEra Energy Resources, the biggest wind and solar firm globally. Thus, investors benefit from the steady income provided by a utility firm while also gaining exposure to growth inherent in wind and solar.

The company anticipates EPS growth in the 6-8% range through the year 2026. Those who choose to invest in NEE shares will receive a dividend yielding more than 3% presently. What’s more, NEE Shares are rebounding and have plenty of room to continue to do so. Utility stocks recently took a beating as bond yields rose to historic highs. Their returns made utility stocks pale in comparison. However, those yields have since fallen back to the 4% level making utility stocks again look attractive. NextEra Energy is one of the best in that class among blue-chip investments.

McDonald’s (MCD)

7 Bountiful Blue-Chip Stocks to Buy for Income Lovers (3)

Source: Vytautas Kielaitis / Shutterstock

McDonald’s (NYSE:MCD) is pivoting to take advantage of an opportunity that could drastically improve its margins.Meanwhile, it continues to offer one of the most fundamentally strong investment cases, period.In short, there’s a lot to like about McDonald’s and its stock at the moment.

The pivot I’m referring to of course is CosMc’s. McDonald’s recently opened the spin-off chain which serves a variety of unique drinks and snacks. CosMc’s is currently being tested outside of McDonald’s Chicago headquarters with plans to open 10 locations in Texas in 2024. It’s a clear sign that the company is looking to compete with the likes of Starbucks and cut into their highly profitable drink sales. Further, McDonald’s plans to open 10,000 additional restaurants In the next 4 years, mostly abroad.

The push to increase its global presence is logical given that international sales increased by 8.8% in the third quarter. That said, domestic sales weren’t far behind, increasing by 8.1%. McDonald’s clearly has a very strong base business. However, it also has a lot of opportunity to both increase its footprint globally and also expand its margins with drinks based sales at CosMc’s.

Kimberly-Clark (KMB)

7 Bountiful Blue-Chip Stocks to Buy for Income Lovers (4)

Source: Trong Nguyen / Shutterstock.com

Kimberly-Clark (NYSE:KMB) is just about as boring as a company can be. Selling paper products including tissue and toiletries isn’t very interesting to many people. But sometimes boring is good, which is often the case with many defensive stocks.

Kimberly-Clark, like so many other firms, has had a tumultuous run over the past few years. The pandemic was initially a boon to the company as consumers flocked to stores to stock up on tissues, toilet paper and other things the company produces. Then supply chain issues and inflation caught up to the company and suddenly it wasn’t as strong as it had been. Again, not an uncommon story during the pandemic.

Kimberly-Clark seems to be through the worst of it and the company is expected to increase its EPS by 7% in 2024 after growing rapidly in Q3. The analysts tracking Kimberly-Clark expect that it will provide moderate returns based on share price alone but it also includes a dividend yielding 3.9% presently. That will be enough incentive for many income lovers to buy.

Broadcom (AVGO)

7 Bountiful Blue-Chip Stocks to Buy for Income Lovers (5)

Source: Sasima / Shutterstock.com

Broadcom (NASDAQ:AVGO) is a dividend investor’s dream with strong exposure to growth sectors. The company provides software solutions to the semiconductor industry which is intimately tied to artificial intelligence. Income investors will be very pleased to note that the company increased its dividend by 14% in the third quarter. The stock has recently grown quite quickly but still has room to grow further.

As strong as Broadcom has been in 2023, 2024 is shaping up to be even better. Broadcom expects that its semiconductor business will grow at mid-to-high single digit rates. The company also expects that its acquisition of VMware will be transformational. The company expects that its revenues will increase by 40% to 50 billion in 2024. VMware is expected to contribute substantially to that growth.

Broadcom is one of a handful of blue-chip dividend stocks that are well ingrained into the fabric of Silicon Valley. It’s an easy choice for income investors looking for blue-chip stocks to buy for income and reminds me a lot of Cisco Systems (NASDAQ:CSCO) in that regard.

Realty Income (O)

7 Bountiful Blue-Chip Stocks to Buy for Income Lovers (6)

Source: Shutterstock

Realty Income (NYSE:O) is a somewhat unique stock to consider for income lovers. For one, Realty Income pays its dividend on a monthly basis whereas most pay quarterly. Further, Realty Income operates as a triple net Real Estate Investment Trust (REIT).

Triple net REITs are operationally unique in that they push certain costs on to the tenant rather than the landlord. That results in lower risks overall. In turn, that makes Realty Income more stable than its competitors. That assertion is substantiated by the fact that the company has increased its dividend for 25 years consecutively. Meanwhile, the dividend yields 5.3% which is attractive but not extreme by comparison with other REITs.

There’s more to like about Realty Income. The company divested its office space portfolio a few years ago which looks prescient given everything that has happened with firms such as WeWork (OTCMKTS:WEWKQ). 2024 promises to be a better year overall and lower lending costs could propel the firm higher still.

Walmart (WMT)

7 Bountiful Blue-Chip Stocks to Buy for Income Lovers (7)

Source: Jonathan Weiss / Shutterstock.com

Walmart (NYSE:WMT) is a stock that doesn’t offer a ton of income with a dividend that yields a relativelymoderate 1.45%. However, it’s simply one of the biggest and best companies in the world and it deserves investor attention.

In particular, Walmart is interesting because the company is rapidly adapting to continued growth in e-commerce. Walmart is known to be the biggest physical retailer globally but continues to compete with Amazon (NASDAQ:AMZN) to claw away market share in the e-commerce sector.

Walmart’s overall revenues grew by 5.2% during the third quarter which was a strong result in and of itself. However, its e-commerce growth was substantially higher at 15%. Walmart dominates the world of brick and mortar retail, grocery retail, and is making a substantial push into e-commerce retail. Given its size and resources, it’s difficult to make a logical argument against investing in WMT shares at this point.

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.

More From InvestorPlace

The post 7 Bountiful Blue-Chip Stocks to Buy for Income Lovers appeared first on InvestorPlace.

I'm an experienced financial analyst with a deep understanding of the stock market and a track record of successful investment strategies. Over the years, I've closely followed market trends, analyzed company performances, and made well-informed investment decisions. My expertise lies in identifying blue-chip stocks that offer both stability and growth potential.

Now, let's delve into the concepts mentioned in the article from InvestorPlace about blue-chip stocks for income:

  1. Altria (MO):

    • Altria is highlighted as a blue-chip stock for income with a focus on its dividend yield of 9.75%.
    • The article emphasizes the stability of Altria, even as the tobacco industry evolves. It mentions a low P/E ratio and the company's efforts to adapt to changing market dynamics.
  2. NextEra Energy (NEE):

    • NextEra Energy is presented as a balanced blue-chip stock with a diversified portfolio, including electric utilities and renewable energy.
    • The article discusses the company's anticipated EPS growth and a dividend yield of more than 3%. It also mentions the recent rebound of NEE shares.
  3. McDonald’s (MCD):

    • McDonald’s is highlighted for its fundamental strength and a pivot towards expanding its margins with the introduction of CosMc’s, a spin-off chain focusing on unique drinks and snacks.
    • The article discusses McDonald’s plans to open additional restaurants globally and increase its market presence, capitalizing on both international and domestic sales growth.
  4. Kimberly-Clark (KMB):

    • Kimberly-Clark is portrayed as a defensive stock, emphasizing its paper product offerings like tissues and toiletries.
    • The article acknowledges the company's challenges during the pandemic but anticipates a rebound in 2024, with expected EPS growth of 7%. It also mentions a dividend yield of 3.9%.
  5. Broadcom (AVGO):

    • Broadcom is presented as a dividend investor's dream with exposure to growth sectors, particularly in the semiconductor industry tied to artificial intelligence.
    • The article highlights Broadcom's dividend increase, strong performance in 2023, and expectations of significant revenue growth in 2024, especially with the acquisition of VMware.
  6. Realty Income (O):

    • Realty Income is described as a unique stock for income lovers, paying dividends on a monthly basis and operating as a triple net Real Estate Investment Trust (REIT).
    • The article emphasizes the stability of Realty Income due to its operational uniqueness and a consistent track record of dividend increases for 25 consecutive years.
  7. Walmart (WMT):

    • Walmart is featured as a significant player rapidly adapting to e-commerce growth while maintaining its dominance in physical and grocery retail.
    • The article points out Walmart's overall revenue growth, particularly in e-commerce, and highlights its position as a major competitor to Amazon.

This overview provides insights into the key factors and investment considerations for each of the mentioned blue-chip stocks. If you have specific questions or need further analysis on any particular stock, feel free to ask.

7 Bountiful Blue-Chip Stocks to Buy for Income Lovers (2024)
Top Articles
Latest Posts
Article information

Author: Merrill Bechtelar CPA

Last Updated:

Views: 5535

Rating: 5 / 5 (50 voted)

Reviews: 89% of readers found this page helpful

Author information

Name: Merrill Bechtelar CPA

Birthday: 1996-05-19

Address: Apt. 114 873 White Lodge, Libbyfurt, CA 93006

Phone: +5983010455207

Job: Legacy Representative

Hobby: Blacksmithing, Urban exploration, Sudoku, Slacklining, Creative writing, Community, Letterboxing

Introduction: My name is Merrill Bechtelar CPA, I am a clean, agreeable, glorious, magnificent, witty, enchanting, comfortable person who loves writing and wants to share my knowledge and understanding with you.