All 260+ Blue Chip Stocks List For 2021 | The Top 7 Blue Chip Dividend Stocks Now

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All 260+ Blue Chip Stocks List For 2021 | The Top 7 Blue Chip Dividend Stocks Now


Updated on July 9th, 2021 by Bob Ciura

Spreadsheet data updated daily

In poker, the blue chips have the highest value. We don’t like the idea of using poker analogies for investing. Investing should be far removed from gambling. With that said, the term “blue chip stocks” has stuck for a select group of stocks….

So what are blue chip stocks?

Blue chip stocks are established, safe, dividend payers. They are often market leaders and tend to have a long history of paying rising dividends. Blue chip stocks tend to remain profitable even during recessions.

At Sure Dividend, we define blue chip stocks as companies that are members of 1 or more of the following 3 lists:

You can download the complete list of all 260+ blue chip stocks (plus important financial metrics such as dividend yield, P/E ratios, and payout ratios) by clicking below:

In addition to the Excel spreadsheet above, this article covers our top 7 best blue chip stock buys today as ranked using expected total returns from the Sure Analysis Research Database.

Our top 7 best blue chip stock list excludes MLPs and REITs. The table of contents below allows for easy navigation.

Table of Contents

The spreadsheet and table above give the full list of blue chips. They are a good place to get ideas for your next high quality dividend growth stock investment…

Our top 7 favorite blue chip stocks are analyzed in detail below.

The 7 Best Blue Chip Buys Today

The 7 best blue chip stocks as ranked by 5-year expected annual returns from The Sure Analysis Research Database (excluding REITs and MLPs) are analyzed in detail below. In this section, stocks were further screened for satisfactory Dividend Risk score of ‘C’ or better.

Blue Chip Stock #7: AT&T Inc. (T)

AT&T is a telecommunications giant, as its core Communications segment provides mobile, broadband and video to 100 million U.S. consumers and 3 million businesses.

On April 22nd, 2021 AT&T reported Q1 2021 results for the period ending March 31st, 2021. For the quarter the company generated $43.9 billion in revenue, up 2.7% from $42.8 billion in Q1 2020, as higher mobility and WarnerMedia revenue more than offset declines in domestic video, business wireline and Latin America.

Source: Investor Presentation

Reported net income equaled $7.5 billion or $1.04 per share. On an adjusted basis, earningspershare equaled $0.86 compared to $0.84 in the year-ago quarter. AT&T ended the quarter with a net debttoEBITDA ratio of 3.1x.

AT&T is undergoing massive changes as it seeks to unload its satellite TV and media assets. On February 25th, AT&T announced it will spin off multiple assets into a separate company called New DIRECTV that will own and operate the DirecTV satellite TV business, as well as AT&T TV and U-verse video. AT&T will own 70% of the company, and will sell 30% ownership to TPG for approximately nearly $8 billion, which will be used to pay down debt.

On May 17th, 2021 AT&T announced an agreement to combine WarnerMedia with Discovery, Inc. (DISCA) to create a new global entertainment company. AT&T will receive $43 billion in a combination of cash, securities and retention of debt. AT&T shareholders receive stock representing 71% of the new company, with Discovery shareholders owning 29%.

We believe these various deals with allow AT&T to simplify its operations, become more efficient, and return to its core focus on telecom services. Indeed, 5G is a major area of focus for AT&T. The company continues to expand 5G to more cities around the country. AT&T’s 5G service now covers more than 120 million people.

AT&T is optimistic about generating reasonable growth and the payout ratio had been falling, resulting in excess funds to divert toward paying down debt. AT&T also has a long history of increasing dividends each year (AT&T is currently a Dividend Aristocrat).

With a P/E below 10, AT&T is undervalued against our fair value estimate of 11. The combination of 3% expected EPS growth and the 7.4% dividend yield lead to total expected returns of 12.8% per year over the next five years.

Blue Chip Stock #6: Scotts Miracle-Gro (SMG)

SMG manufactures lawn and garden care products. Its family of brands includes Scotts, Miracle-Gro, Ortho, and more.

Not only that, SMG owns a minority interest in TruGreen, the largest residential lawn care service business, and in Bonnie Plants, the largest retail marketer of edible gardening plants. SMG also has a subsidiary, The Hawthorne Gardening Company, which services the hydroponic growth segment.

These brands lead their respective categories, and SMG has the financial strength to advertise its brands to retain their leadership positions.

On May 5th, 2021, Scotts MiracleGro reported its Q22021 results for the quarter ended April 3rd, 2021. The company achieved sales of $1.8 billion during the period, a 32% increase driven by strong volume growth in both of its major business segments.

The company saw record levels of consumer demand for its lawn and garden products, while the Hawthorne segment (lighting, nutrients, etc.) reported its fifth consecutive quarter of sales growth in excess of 60%. Consequently, EPS increased by 25% to $5.64.

Management guided for sales growth of 4%6% in its U.S. consumer segment and raised its Hawthorne segment growth expectations from 20%30% to 30%40%.

Last year, the company raised its regular dividend by 7%, and also approved a special dividend of $5 per share. The stock has a dividend yield of 1.4%. Shares of SMG trade for a 2021 P/E ratio just below 20, compared with our fair value estimate of 25.

We expect annual EPS growth of 6%-7% per year over the next five years. Combined with dividends and valuation changes, we expect total returns of nearly 13% per year for SMG stock.

Blue Chip Stock #5: ABM Industries (ABM)

ABM Industries has increased its dividend for 53 consecutive years. ABM Industries is a leading provider of facility solutions, which includes janitorial, electrical & lighting, energy solutions, facilities engineering, HVAC & mechanical, landscape & turf, and parking.

Source: Investor Presentation

ABM Industries reported its second-quarter earnings results (fiscal 2021) on June 9th. Revenue of $1.5 billion was flat from the previous year’s quarter. Despite flat revenue, margin expansion helped the company grow its bottom line. Earnings-per-share of $0.82 beat analyst estimates by $0.11 per share, representing 37% year-over-year growth. Management also increased its earningspershare guidance to $3.30 to $3.50 for the full fiscal year.

ABM stock yields 1.8%. Due to the low dividend payout ratio and its very stable, recessionresilient business model, ABM Industries’ dividend looks very safe.

Shares also look significantly undervalued, with a fiscal 2021 price-to-earnings ratio of 12.7, which is well below our fair value estimate of 17.5.

We expect total annual returns of 13.7% over the next five years, driven by 5% expected EPS growth, the 1.8% dividend yield, and a ~5.9% annual boost from a rising P/E multiple..

Blue Chip Stock #4: Perrigo Company plc (PRGO)

Perrigo’s history goes all the way back to 1887 when Luther Perrigo, the proprietor of a general store and appledrying business, had the idea to package and distribute patented medicines and household items for country stores. Today, Perrigo operates in the healthcare sector as a manufacturer of overthecounter consumer and pharmaceutical products.

On 3/1/2021, the company announced that it would sell its Generic Rx Pharmaceuticals business to Altaris Capital partners for $1.55 billion.

Perrigo also reported earnings results for the 2021 first quarter on May 11th. Net sales were $1.01 billion, a decrease of 6.8% year over year, due primarily to difficult comparisons as the year-ago quarter involved pandemic-related pantry loading. The 2021 first quarter also had a low incidence of cough/cold related illness versus the same quarter a year ago.

Source: Investor Presentation

Adjusted earningspershare declined 25% for the quarter, but most of the decline was due to the benefit of pantry stockpiling in the year-ago quarter.

The company has scaled back its pharmaceutical operations. Consumer health products now represent approximately 80% of total revenue. And, the company will spinoff its pharmaceutical segment to further focus on consumer products. Focusing on consumer products will add stability to Perrigo, but these products typically grow at a lower rate than pharmaceuticals. Overall, we expect 5% annual earnings growth through 2026.

Perrigo stock trades for a 2021 P/E ratio slightly below 11, compared with our fair value estimate of 15. Shareholder returns will be boosted by a rising valuation multiple, expected EPS growth of 5%, and the current dividend yield of 2%. Overall, total returns are expected to reach 13.7% per year over the next five years.

Blue Chip Stock #3: Comcast Corporation (CMCSA)

Comcast Corporation is a media, communications, and entertainment conglomerate. Its operating segments include Cable Communications, NBCUniversal, Theme Parks, Broadcast TV, and Sky. Collectively, through these segments, Comcast offers high-speed Internet, video, voice, wireless, cable networks, filmed TV, and other services. Comcast generates over $100 billion in annual revenue.

Comcast reported 2021 first-quarter financial results on April 29th. For the first quarter, revenue of $27.2 billion increased 2.3% year-over-year, and beat analyst estimates by $470 million. Adjusted EBITDA of $8.41 billion also beat estimates, which called for $7.54 billion. The cable segment performed well, posting its third consecutive quarter of double-digit adjusted EBITDA growth.

Source: Investor Presentation

Separately, Comcast reported reaching 42 million subscribers for its Peacock stand-alone streaming service. Free cash flow of $5.28 billion again beat expectations of $2.74 billion. On an adjusted basis, earnings-per-share of $0.76 beat by $0.18, and represented 7% year-over-year growth.

We expect 12% annual earnings-per-share growth over the next five years, as the company has a long history of growth. From 2010 to 2019, its EPS grew every year, by an average of 19% per year. We expect a recovery as soon as the COVID-19 pandemic ends.

Over the next five years, as the economy normalizes, we see several drivers for the company’s earnings growth. Revenue growth will be driven primarily by a higher customer count and rate increases. Although video revenue is struggling with cord-cutting, higher revenues in the high-speed internet business have more than offset this headwind.

Shares have a relatively low dividend yield of 1.7%, but the combination of dividends and expected EPS growth of 12% per year (with a flat P/E multiple) will fuel expected returns of 13.7% per year.

Blue Chip Stock #2: Bristol-Myers Squibb (BMY)

Bristol-Myers Squibb is a leading drug maker of cardiovascular and anti-cancer therapeutics, with annual revenues of about $42 billion.

The past year has seen the company transform itself, due to the $74 billion acquisition of Celgene, a peer pharmaceutical giant which derived almost two-thirds of its revenue from Revlimid, which treats multiple myeloma and other cancers.

The end result is that Bristol-Myers Squibb is now an industry giant, which continues to generate strong results even during the coronavirus pandemic.

Source: Investor Presentation

Bristol-Myers reported a mixed first-quarter report on April 29th. Revenue of $11.1 billion rose 3% year-over-year, and 8% excluding COVID-19 related buying patterns from the prior-year quarter. However, revenue missed expectations which called for $11.16 billion.

U.S. revenue increased 4% to $7.0 billion in the quarter. International revenues increased 1% to $4.1 billion in the quarter, but declined 5% after excluding foreign exchange impacts. Adjusted earnings-per-share of $1.74 grew 1.2% from the same quarter last year, but missed expectations by $0.07 per share.

The company also reiterated its 2021 non-GAAP EPS guidance range of $7.35-$7.55. Worldwide revenue is expected to increase in the high-single digits for 2021. The company expects to maintain a non-GAAP gross margin of 80.5% for the full year. Therefore, Bristol-Myers Squibb expects 2021 to be another year of growth. We expect 3% annual earnings growth over the next five years for BMY.

The company’s recently announced $2 billion addition to its share repurchase is another positive catalyst for earnings-per-share growth.

Based on expected EPS of $7.45, shares of BMY trade for a forward P/E ratio of 9.0. Our fair value P/E estimate is a P/E of 13-14, which is more in-line with the pharmaceutical peer group. Lastly, BMY has a 2.9% dividend yield, leading to total expected returns of 14.0% per year over the next five years.

Blue Chip Stock #1: Richie Bros. Auctioneers (RBA)

Ritchie Bros. offers endtoend solutions for buying and selling used heavy equipment, trucks, and other assets. The company’s primary selling channels include Ritchie Bros. Auctioneers, the world’s largest industrial auctioneer featuring online bidding, IronPlanet, an online marketplace with weekly auctions, and IronClad Assurance, which provides equipment condition certification. The company generates revenue around $1.4 billion annually, and is based in Canada

On May 10th, 2021, Ritchie Bros. reported its Q12021 results for the period ended March 31st, 2020. For the quarter, revenues increased by 21% to $361.6 million, with inventory revenue increasing by 39%, mainly as a result of a change in GTV (Gross Transaction Value) mix and total service revenue growth.

Specifically, service revenues increased by 13%. This includes fee revenues expanding by 14% (in line with total GTV growth) and commission revenue increasing by 11%. Earnings-per-share increased 19% to $0.25 for the quarter.

The underlying marketplaces appear very healthy.

Source: Investor Presentation

We expect 13% annual EPS growth over the next five years. It has many positive growth catalysts. In March, Ritchie announced that it was awarded the support of the U.S. Department of Defense with new surplus term sale contracts as the company was declared the apparent high bidder for two new East and West contracts. Each of these contracts has a base term of two years with three oneyear renewal options.

Based on our expected EPS of $1.80, shares trade for a 2021 P/E of 33, which matches our fair value estimate. The stock has a 1.5% dividend yield. Therefore, we expect total returns of 14.5% per year for Ritchie Bros. stock.

Final Thoughts

Stocks with long histories of increasing dividends are often the best stocks to buy for long-term dividend growth and high total returns. But just because a company has maintained a long track record of dividend increases, does not necessarily mean it will continue to do so in the future. Investors need to individually assess a company’s fundamentals, particularly in times of economic distress.

The coronavirus pandemic of 2020 had a significant impact on the global economy, but high-quality blue chip stocks such as the 7 in this article continued to generate profits, and pay dividends to shareholders. They also have compelling valuations that make them attractive picks for investors interested in total returns.

 

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