Looking for consistent returns and steady income from your investments? Blue-chip dividend stocks may be your answer. These stocks represent large, robust companies with a track record of rewarding shareholders with high-yielding dividends. In this article, we spotlight three such stocks that stand out in the crowd.
With their large market caps and solid reputation, blue-chip companies are often the go-to choice for these dividends. If these companies also offer strong dividend yields, they become an irresistible mix of reliability and income potential.
So, buckle up as we navigate the specifics of three blue-chip dividend stocks. These could be the key to unlocking value in your portfolio in 2023. Each offers a unique combination of stability, growth prospects, and robust dividend yield. That makes them excellent candidates for an investment strategy that highly values dividends. Let’s dive in and explore these high-performing gems.
National Health Investors (NHI)
National Health Investors (NYSE:NHI) is a strong pick as one of those blue-chip dividend stocks. This real estate investment trust (REIT) focuses on sale-leaseback, joint-venture, mortgage and mezzanine financing of need-driven and discretionary senior housing and medical investments. It also has a history of consistent dividend payments.
Investors may appreciate NHI stock for several reasons. For one, its dividend yield stands at an impressive 6.89%. The company also reported a 333.80% increase in its earnings per share (EPS) last quarter, which means its dividend is well covered by the company’s fundamentals.
On a technical level, NHI can be picked up at a relative bargain. The stock is trading 3.03% below its 200-day moving average, and analysts gave it a $57.25 price target. These REITs can be impressive for income as well as diversifying a portfolio that might be overweight in other types of stocks. Real estate is a moderate diversifier and may earn a spot even if one is focused mainly on total return over income.
Main Street Capital (MAIN)
Main Street Capital (NYSE:MAIN) is another one of the blue-chip dividend stocks on our list. The brand is a principal investment firm that primarily provides long-term debt and equity capital to lower middle-market companies and debt capital to middle-market companies.
The company has a dividend yield of 6.92% and is well-covered with a dividend payout ratio of 59%. What I like about MAIN stock is that its primary operating segment also opens up a lot of room for growth. Mid-sized companies have proven their business execution and often turn to companies like MAIN stock to scale their operations further. The investment, therefore, provides a blend of a stable income without sacrificing too much capital returns. Main Street has only a $3.21 billion market cap itself.
Times have been good for this company in the recent past. Sales surged 51.50% quarter-over-quarter. Furthermore, the company is doing exceedingly well in turning those sales into profits. Its gross margin stands at 79.30%, while its net profit margin is 61.30%. With more sales and internal efficiency naturally comes improved cash flow and a safer and stronger dividend yield for investors in the future.
Enbridge (NYSE:ENB) is a Canadian multinational energy transportation company focusing on the transportation, distribution and generation of energy — primarily in North America.
There are some reasons that make Enbridge one of those blue-chip dividend stocks you should have on your watch list. The first is that its dividend yield stands at 7.19%. But the most important reason is that it may have fallen to undervalued levels. Analysts gave ENB stock a 45.11 price target, and it has fallen 13.68% over the past year.
However, this yield does come with some risks. The company’s stock price dipped around 4% after announcing its earnings. These earnings exceeded its previous guidance. The main reason that spooked investors seemed to be concerns over its debt levels. The company’s current ratio is 0.60, while its long-term debt-to-equity ratio is 1.31. These numbers are a moderate cause for alarm.
The flip side is that Enbridge is a historically resilient company and that debt has been put to good use towards capital expenditures. Plus, the business has a significant interest in natural gas, which is seen as the bridge between thermal coal and longer-term solutions like renewables or even nuclear. Locking shares now while they’re cheap may improve an investor’s cost basis moving forward.
On the date of publication, Matthew Farley did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.