What Are Some Blue Chip Stocks With High Dividend Yields for Retirees?

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So you’re in retirement and unwilling to take huge risks on the stock market. Fair enough. You could potentially lose your entire portfolio on a bad bet. But that doesn’t mean you have to stay out of the stock market altogether. There’s a happy medium. You can, instead, take small risks on blue chip stocks that are well established with high dividend yields. 

This move has the potential to help you increase your portfolio steadily while limiting risks substantially, as blue chip stocks generally have less risk than other types of stocks. So what are blue chip stocks, and which ones offer high dividend yields?

Also see two dividend-paying stocks Suze Orman says to consider investing in.

What Are Blue Chip Stocks?

First, before you start your investing, let’s talk about blue chip stocks. If you want to invest in typically lower-risk companies that are stable and tend to perform well, that’s where blue chip stocks come in. 

Blue chip stocks are those offered by companies that have built a reputation over decades as dependable, predictable organizations with high brand recognition and a history of positive returns for their investors, like you. 

The downside to blue chip stocks is that they typically don’t have high dividend yields. In other words, they don’t have huge payouts on an annual basis. For example, the trailing dividend yield of Apple (AAPL) averages between 0.5% and 1.5%. 

This will still steadily generate some income, but it’s not much, and it will take years to make any real money with those numbers. Microsoft (MSFT) has slightly higher numbers. In contrast, Coca-Cola (KO) has a trailing dividend yield of around 3% on average.

Why Do You Want High Dividends? 

Realize first that only some companies pay out dividends. Plenty of companies, like Amazon (AMZN) and Berkshire Hathaway (BRK), reinvest earnings into the company instead.

However, some blue chip companies will pay out dividends, a portion of earnings, to their stockholders, typically at the end of each quarter. 

If you’re looking for dividends, you may want them to be high so you can get a better payout. Once you’re in retirement, you may want to invest some of your portfolio in high-dividend stocks since that could provide you with cash flow that is higher than what an average blue chip stock pays.

No, you don’t want to lose it all, so never risk more than you can afford to lose. You should also look into the stock’s dividend-paying track record to ensure it’ll offer consistent income, as high dividend yields could also be viewed as a negative sign. Be sure to look into the company’s fundamentals as well as its dividend yield when deciding whether to invest.

But if you want to see if you can get some more growth year over year while you’re living your golden years, check out these blue chip stocks with high dividend yields.

Western Union Co. 

A surprising giant with a high dividend yield is Western Union (WU), a money transfer company that has been around for almost 200 years. The company has shown its ability to innovate in the digital age and keep the money flowing in.

Shareholders can get a healthy 8.78% dividend yield.

Altria Group Inc.

Altria Group (MO) offers a high dividends to its shareholders at 7.58%. The corporate successor to Philip Morris, this company is also a shareholder in Anheuser-Busch InBev, the largest brewing company in the world. Like it or not, the products this company sells aren’t going away anytime soon, which is good for its bottom line. 

Pfizer

A household name in drug manufacturing, Pfizer (PFE) is selling for around $26 per share.

Its dividend yield is 6.37%, which is among the highest in blue chip stocks. 

Bristol-Myers Squibb

Bristol-Myers Squibb (BMY), another drug company on this list, saw success recently with the Food and Drug Administration approval of the schizophrenia drug Cobenify. This puts the company in a good position to continue to grow.

The company has a dividend yield of 4.19%, and it’s selling for about $56 per share.

Roche

One more drug company to consider investing in for a high dividend yield is Roche (RHHBY). The Swiss healthcare giant is focused on developing innovative medicines and treatments to improve health outcomes and revolutionize healthcare, per its website.

The dividend yield is 4.04%, and shares are selling for just shy of $35 each. 

Nestlé

Speaking of household names, Nestlé (NSRGY) is the largest food and beverage manufacturer in the world. According to Morningstar, the company has struggled in the short term, but it still looks solid over the long term.

The dividend yield is 4.14%, and the stock is trading for a bit more than $82. 

Coca-Cola

If we’re talking Nestlé, we have to talk Coca-Cola, right? Another long-running household name, Coca-Cola doesn’t bring in the highest dividend, but 3.1% isn’t bad, especially considering the fact that its dividend has continued to rise for 62 consecutive years. 

In the end, it’s good to have a little bit of every kind of stock, or, in other words, a diversified portfolio. This is so you can enjoy a balance of a little bit of everything and reduce your risk.

Editor’s note: All dividend yields and stock prices were sourced from Nasdaq and are as of Dec. 23, 2024.

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