Learn how to Find the Best Blue-Chip Stocks That Pay High Dividends

The thought of shopping for blue-chip stocks is an incredible long-term strategy for value investing. We will steadily construct wealth and passive dividend income with blue-chip stocks through dollar-cost averaging.

Today, we share what blue-chip stocks are, and tips on how to find the perfect opportunities with high dividend yields to hurry up your journey to financial independence.

What Is a Blue-Chip Stock?

Blue-chip stock is a reputation commonly reserved for industry-leading corporations with the strongest products and types inside a distinct segment.

Blue-chip corporations normally have the next characteristics:

  • Larger than $10 billion in market capitalisation.
  • A powerful competitive edge equivalent to technological barriers or exceptional services and products.
  • A protracted history of regular growth and overcoming market crashes.
  • Often a key component of market indices equivalent to S&P 500, Dow Jones Industry Average or NASDAQ Composite.
  • Though not all blue-chip stocks issue dividends, dividend-earning blue-chip stocks have the potential of growing dividends in the long term.

So blue-chip stocks work thoroughly with the buy-and-hold strategy for portfolios with long-term investments.

Are Blue-Chip Stocks Secure?

Value investors consider buying and holding blue-chip stocks pretty secure investments, because these stocks normally don’t fluctuate very much during economic cycles and times of high market volatility. Investing in blue-chip stocks is low risk and a option to construct personal equity in the long term.

Benefits of Investing in Blue-Chip Stocks

  • Mature and stable business model.
  • Excellent corporate governance.
  • Financially strong.
  • Less volatile in market value.
  • Stable and consistently growing dividends.
  • High liquidity.
  • Good candidates for long-term investing.

Disadvantages of Investing in Blue-Chip Stocks

  • Higher stock prices.
  • A smaller upward movement in a bull market.
  • Not suitable for short-term investment.

Learn how to Find Blue-Chip Stocks With High Dividend Yields?

Dividend Stock Screener provides a couple of easy-to-use filters that help us find blue-chip stocks with high dividend yields.

Filter settings to seek out high dividend yield blue-chip stocks.

  • For the reason that US stock market is mature with huge trading volume, we are able to filter for US stocks only.
  • We wish to seek out extremely profitable corporations, indicated by Return on Equity (ROE) >15%, which implies the corporate generates plenty of benefit from shareholders’ equity.
  • We will find mature corporations with a protracted history of growth, using the 5-year average of Revenue Growth (5Y) >15%, which shows a medium to long-term growth potential.
  • The 5-year average of EPS Growth (5Y) >15% means the corporate is extremely profitable. For the reason that stock price correlates well with EPS, this also means strong upside potential to the stock price.
  • By picking Market Cap >$10 billion, we select mature corporations with less volatile stock prices.

Finally, we sort the list by Dividend Yield %, to seek out blue-chip stocks with the best dividend potential.

An inventory of high dividend yield blue-chip stocks.

The list of high dividend blue-chip stocks shows CE’s Fair Value of $165.67 is larger than the market price of $113.89, with a forty five.46% Upside potential.

CE is an undervalued blue-chip stock with a high dividend yield.

So we should buy the Celanese Corp stock while it’s undervalued to enjoy a possible 45% bullish outlook and between 1.85% to 2.39% Dividend Yield annually.

Celanese Corporation is a world leader within the chemical industry, and a component of each the S&P 500 and Russell 1000 indices. All these qualities indicate CE is a blue-chip stock worthy of long-term investment. We will even trade Covered Calls on CE to spice up our returns.

Now you already know tips on how to find dividend-producing blue-chip stocks using the Dividend Screener. Remember to make use of the screener often to seek out the perfect blue-chip stocks to purchase to build up passive income in the long term.

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