BofA Securities Says No Rate Cuts in 2025 or 2026: Grab These High-Yield Dividend Blue Chips Now

Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciation has contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations. A study from Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the half-century period from 1973 to 2023. Over the same timeline, this was more than double the annualized return for non-payers (3.95%). With a major bank on the record saying there will be no cut in the federal funds rate this year or next, it makes sense to buy high-yield dividend stocks now.

While some Wall Street strategists are worried that growth could slow in the coming quarters due to tariffs and other intangibles, the reality is that at the current aggregate level of 4.3%, the federal funds rate is actually below the long-term median of 4.6%. If the BofA economist Stephen Juneau turns out to be correct in his assumption that a moderate 1% to 2% growth in the economy keeps the Federal Reserve on hold, then high-yield dividend stocks that pay more than the federal funds rate should stay in favor over the next two years.

We screened our 24/7 Wall St. high-yield blue chip dividend stocks research database looking for companies that are Buy-rated on Wall Street and have yields above 4%. Four stocks with dependable and growing dividends are perfect for accommodating a continued, steady no-cut policy.

Why do we cover high-yield dividend stocks?

Dividend stocks provide investors with reliable streams of passive income. Passive income is characterized by its ability to generate revenue without requiring the earner’s continuous active effort, making it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.

Altria

This is one of the world’s largest producers and marketers of cigarettes and other tobacco-related products, and its stock offers value investors a great entry point. Altria Group Inc. (NYSE: MO) manufactures and sells smokable and oral tobacco products in the United States through its subsidiaries.

The company provides cigarettes primarily under the Marlboro brand, as well as:

• Cigars and pipe tobacco, principally under the Black & Mild and Middleton brands
• Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
• on! Oral nicotine pouches
• e-vapor products under the NJOY ACE brand

It sells its tobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.

Altria used to own over 10% of Anheuser-Busch InBev, the world’s largest brewer. Earlier this year, the company sold 35 million of its 197 million shares through a global secondary offering. That represents 18% of its holdings but still leaves 8% of the outstanding shares in its back pocket. Altria also announced a $2.4 billion stock repurchase plan partially funded by the sale.

The Goldman Sachs price target for the Buy-rated stock is $57, and it looks to be going higher soon. The company recently increased its quarterly dividend by 4.1%, from $0.98 to $1.02 per share, marking its 59th dividend increase in the past 55 years.

Chevron

This integrated giant is a safer option for investors looking to position themselves in the energy sector and is a Warren Buffett favorite. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide through two segments.

The Upstream segment is involved in the following:

• Exploration, development, production, and transportation of crude oil and natural gas
• Processing, liquefaction, transportation, and regasification associated with liquefied natural gas
• Transportation of crude oil through pipelines
• Transportation, storage, and marketing of natural gas, as well as operating a gas-to-liquids plant

The Downstream segment engages in:

• Refining crude oil into petroleum product
• Marketing crude oil, refined products, and lubricants
• Manufacturing and marketing renewable fuels
• Transporting crude oil and advanced products by pipeline, marine vessel, motor equipment, and rail car
• Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives

Chevron announced in the fall of 2023 that it has entered into a definitive agreement with Hess to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on October 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The transaction’s total enterprise value, including debt, is $60 billion. The deal was approved by the government last year and should close sometime this summer.

Bristol-Myers Squibb

This global biopharmaceutical company committed to discovering, developing, and delivering innovative medicines remains a solid stock to own long-term. Bristol-Myers Squibb Co. (NYSE: BMY) discovers, develops, licenses, manufactures, and markets pharmaceutical products worldwide.

The company offers products in:

• Hematology
• Oncology
• Cardiovascular
• Immunology therapeutic classes

Bristol-Myers Squibb products include:

• Revlimid, an oral immunomodulatory drug for the treatment of multiple myeloma
• Opdivo for anti-cancer indications
• Eliquis, an oral inhibitor indicated for the reduction in risk of stroke/systemic embolism in NVAF and for the treatment of DVT/PE
• Orencia for adult patients with active RA and psoriatic arthritis, as well as reducing signs and symptoms in pediatric patients with active polyarticular juvenile idiopathic arthritis

The company also provides:

• Sprycel for the treatment of Philadelphia chromosome-positive chronic myeloid leukemia
• Yervoy for the treatment of patients with unresectable or metastatic melanoma
• Abraxane, a protein-bound chemotherapy product
• Implicit for the treatment of multiple myeloma
• Reblozyl for the treatment of anemia in adult patients with beta-thalassemia

Stanley Black & Decker

Stanley Black & Decker Inc. (NYSE: SWK) is the world’s largest tool company, with 50 manufacturing American facilities and more than 100 worldwide. With the potential for the economy to slow down, you can bet that the do-it-yourself legions will fix rather than buy new. Stanley Black & Decker provides hand tools, power tools, outdoor products, and related accessories in North America, Europe, and Asia.

Its Tools & Outdoor segment offers professional-grade corded and cordless electric power tools and equipment, including:

• Drills
• Impact wrenches and drivers
• Grinders, saws, routers, and sanders
• Pneumatic tools and fasteners, such as nail guns, nails, staplers and staples, and concrete and masonry anchors; corded and cordless electric power tools
• Hand-held vacuums, paint tools, and cleaning appliances
• Leveling and layout tools, planes, hammers, demolition tools, clamps, vises, knives, saws, chisels, and industrial and automotive tools
• Drill, screwdriver, router bits, abrasives, saw blades, and threading products
• Toolboxes, sawhorses, medical cabinets, and engineered storage solutions
• Electric and gas-powered lawn and garden products

This segment sells its products under these brand names:

• Dewalt
• Craftsman
• Cub Cadet
• Black+Decker
• Hustler

The company’s Industrial segment provides:

• Threaded fasteners, blind rivets and tools, blind inserts and tools
• Drawn arc weld studs and systems
• Engineered plastic and mechanical fasteners
• Self-piercing riveting systems
• Precision nut running systems
• Micro fasteners
• High-strength structural fasteners
• Axel swage, latches, heat shields, pins, couplings, fitting, and other engineered products
• Attachments used on excavators and handheld tools.

This segment sells its products through a direct sales force and third-party distributors to the automotive, manufacturing, electronics, construction, aerospace, and other industries.

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