Looking for blue chips stocks that can withstand inflationary pressures? We screened for blue chip companies that have performed well during historic bouts of inflation and pay solid dividend yields.
Here they are below, plus come commentary on each. For our recent list of dividend payers outside US borders, check out these 13 emerging market names here.
- Altria Group (MO): This $50 billion enterprise sells one of the most price inelastic products on the market. Cigarette input costs are a fraction of cost of goods sold for this company. Shares trade below $25 apiece and yield 5.96%.
- AstraZeneca PLC (AZN): This pharma giant is one of three highlighted in this article that are particularly immune to commodity inflation. Margins remained intact during high inflation quarters dating back to 1994. This $68 billion company trades at 48.84 and yields 5.22%.
- Bristol Myers Squibb (BMY): This other pharmaceutical behemoth demonstrates resilience in its margins through inflationary quarters dating back to 1976. Shares in this $43.8 billion company trade at 25.61 and yield 5.04%.
- Merck & Co., Inc. (MRK): Merck was the third most resilient, measured by average reduction in margins in inflationary quarters dating back to 1971. Shares in this $101 billion company trade at 32.79 and yield 4.64%.
- Kimberly-Clark Corporation (KMB): This maker of tissue and personal care products has expanded into healthcare over the years. The company has been able to drive earnings growth and maintain margins in inflationary quarters dating back to 1986. Shares of KMB trade for 64.96 and yield 4.06%.
- H.J. Heinz Company (HNZ): This consumables company relies heavily on its brand-name to outdistance peers in the generic products categories in which it competes. Heinz has successfully driven earnings growth and maintained margins during quarterly bouts of inflation dating back to 1985. Shares in this $15 billion company trade for 48.06 apiece and yield 3.68%.
- Sysco Corporation (SYY): The global marketer and distributor of food service products wrings every penny out of its unmatched distribution and automation network to pick up transportation and input cost efficiencies. The company has successfully navigated inflationary quarters dating back to 1987. Shares trade at 28.25 and yield 3.58%.
- Lockheed Martin Corporation (LMT): This major player in defense relies on intellectual property and its capable personnel to drive earnings, insulating it from increases in input costs. Lockheed has maintained margins through inflationary periods dating back to 1977. Shares trade at 81.48 apiece and yield 3.54%.
For five other REITs that can raise rents if inflation hits, see our recent article here. And as always, please do your own due diligence before buying shares of any of the companies above.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Equities that pay fair to good dividends are great choices for income oriented portfolios.
You can anticipate capital gains as well with MO, RAI, GE, PFE, VGR, ED, T, VZ, etc.
When you invest, putting your capital in companies that return fair dividends to shareholders has proven itself to be a good formula.
Ed Rudy
You can anticipate capital gains as well with MO, RAI, GE, PFE, VGR, ED, T, VZ, etc.
When you invest, putting your capital in companies that return fair dividends to shareholders has proven itself to be a good formula.
Ed Rudy
Thanks Investment Underground for an excellent list of good dividend paying companies, many of which are Dividend Champions with good dividend growth rates. It appears to be time to buy the defense stocks and health care stocks will be participating in a sector rotation soon.
Interesting articles: In your healthcare article, you say AZN pays 7.68% dividend. Here you say it pays 5.2%. Does anybody have any real idea of what AZN pays? The websites that collect this information are all over the place. It's an English company and maybe it pays varying rates depending on performance.
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