×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Tags: blue-chip dividend stocks | mcdonalds | comcast | j.m. smucker
OPINION

Bob Ciura: 3 Blue-Chip Dividend Stocks for Long-Term Growth

Bob Ciura: 3 Blue-Chip Dividend Stocks for Long-Term Growth
(AP)

Bob Ciura By Monday, 05 September 2022 02:09 PM EDT Current | Bio | Archive

Investors seeking long-term dividend growth should consider blue-chip stocks. Over the long run, the dividend stocks that have the ability to grow their payouts, along with recession-proof businesses, will provide superior returns.

Dividend safety is especially important when stock prices are falling. Many companies cut their dividend payouts in 2020 during the coronavirus pandemic, particularly in the retail and energy sectors. In this article, we’ll take a look at three blue chip stocks we think offer investors the best combination of dividend growth potential and dividend safety.

Blue-Chip Stock: McDonald’s Corp. (MCD)

McDonald’s is the largest restaurant stock in the world. McDonald’s has increased its dividend for more than four decades in a row, which makes it a member of the Dividend Aristocrats.

McDonald’s has over 40,000 locations around the world. Its major markets are the U.S., China, Japan, and European nations such as France and Germany. Over 90% of the stores are franchised and the rest are company owned. However, the company owns about 55% of the real estate and 80% of the buildings in its network. Total revenue was around $23.2B in 2021.

In the most recent quarter, total revenue came declined 3%, mostly due to unfavorable currency fluctuations. Excluding currency, revenue grew 4% system-wide. On a geographic basis, sales increased +3.7% in the US, +13.0% in the international markets, and +16.0% in the international developmental licensed markets.

McDonald’s competitive advantage lies in its global scale, cost advantages, immense network of restaurants, well-known brand, and real estate assets. The company has one of the most well-known brands in the world and has successfully replicated its business model globally. Next, McDonald’s often owns prime real estate making it difficult for competitors to gain traction.

This allows the company to generate strong profits year after year, and reward shareholders with dividends. McDonald’s stock currently yields 2.2%.

Blue-Chip Stock: Comcast (CMCSA)

Comcast is a media, entertainment and communications company. Its business units include Cable Communications (High-Speed Internet, Video, Business Services, Voice, Advertising, Wireless), NBCUniversal (Cable Networks, Theme Parks, Broadcast TV, Filmed Entertainment), and Sky, a leading entertainment company in Europe that provides Video, High-speed internet, Voice, and Wireless Phone Services directly to consumers.

In the most recent quarter, the company’s revenues climbed 5.1% to $30.0 billion, adjusted EBITDA (a cash flow proxy) rose 10.1% to 9.8 billion, adjusted earnings-per-share climbed 20.2% to $1.01 for the period.

Future growth is likely, particularly for its theme parks business which was decimated by the pandemic. Management sees organic growth opportunities across its businesses, including increasing the capacity of its U.S. broadband network, producing more premium content that can increase engagement at its Peacock streaming service, and building its new theme park, Epic Universe, which is scheduled to open in the summer of 2025.

Comcast has had 14 consecutive annual dividend increases. The fast dividend growth was possible through solid earnings growth and a safe dividend payout ratio. Its dividend is well-covered by earnings and cash flows. Shares currently yield 3%.

Blue-Chip Stock: J.M. Smucker (SJM)

J.M. Smucker has grown into an international powerhouse of packaged food and beverage products including iconic names like Smucker’s, Jif and Folgers, along with pet food brands like Milk Bone, Meow Mix, Kibbles ‘n Bits and 9Lives. The company generated $8 billion in sales last year.

In early June, Smucker’s reported (6/7/22) financial results for the fourth quarter of fiscal 2022, which ended on April 30th, 2022. Sales grew 6% and organic sales grew 9% over the prior year’s quarter. The company raised its prices by 10% to offset the impact of inflation and its volumes edged down only -1%. As a result, its adjusted earnings-per-share grew 18%, from $1.89 to $2.23, and exceeded the analysts’ estimates by $0.34, despite higher costs of commodities, ingredients, manufacturing, and packaging costs.

The company expects sales growth of 3.5% to 4.5% and adjusted earnings-per-share of $7.85-$8.25 for the current fiscal year. This should be more than enough growth and profits to continue raising the dividend each year. SJM has increased its dividend for 25 consecutive years. Shares currently yield 2.9%.
_______________
Bob Ciura has worked at Sure Dividend since October 2016. He oversees all content for Sure Dividend and its partner sites. Bob received a Bachelor’s degree in Finance from DePaul University, and an MBA with a concentration in Investments from the University of Notre Dame.

© 2024 Newsmax Finance. All rights reserved.


BobCiura
Investors seeking long-term dividend growth should consider blue-chip stocks. Over the long run, the dividend stocks that have the ability to grow their payouts, along with recession-proof businesses, will provide superior returns.
blue-chip dividend stocks, mcdonalds, comcast, j.m. smucker
726
2022-09-05
Monday, 05 September 2022 02:09 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved