With oil prices falling off a cliff and global markets taking a dive in the last week, investors are increasingly looking to risk-averse assets in the last days of 2014.
While there are legitimate concerns with overseas markets right now, the U.S. economy is chugging along nicely and blue-chip dividend stocks offer both capital appreciation and some degree of safety.
While not all the companies on today’s lists are commonly considered “dividend stocks,” they’re each worth between $30 billion and $100 billion, and each of them recently announced both share buybacks and dividend increases.
If you want to stay in the stock market but avoid the wild volatility of growth stocks, you might want to consider these three blue-chip dividend stocks that have been lining shareholder pockets with cash:
Cash Cow Blue Chip Stock #1: CVS Health Corp (CVS)
Market capitalization: $103 billion
YTD performance: +30%
The second-largest drugstore chain by locations and the biggest by market cap, CVS Health Corp (CVS) instituted a $10 billion stock buyback program on Tuesday, adding to the $2.7 billion left in its current buyback program. But before you go snapping up shares of CVS stock all willy-nilly, be aware that the company is spacing out the collective $12.7 billion program over several years.
CVS also announced it would be raising its quarterly dividend by 27% to 35 cents per share. The first newly bolstered dividend will be payable on Feb. 2 for shareholders of record on Jan. 22. At current levels, the drugstore’s new annualized dividend amounts to a modest 1.5% dividend yield.
Cash Cow Blue Chip Stock #2: Boeing Co (BA)
Market capitalization: $88 billion
YTD performance: -8%
Aerospace behemoth Boeing Co (BA) also increased its share buyback program this week, hiking the program to $12 billion. The $12 billion figure will include the $4.8 billion left on the company’s previous stock buyback program.
But Boeing wouldn’t be doing a very good job of drowning its investors in cash if it didn’t also raise its quarterly dividend by 25% (as it did). Like CVS’ dividend, BA stock’s new dividend won’t be payable until next year: it should appear in investors’ brokerage accounts on Mar. 6 for shareholders of record on Feb. 13.
The upcoming 91-cent quarterly dividend comes out to nearly a 3% dividend yield annually with BA stock at current levels.
InvestorPlace contributor John Persinos recently wrote about how BA stock is a “rare opportunity” after an overblown market reaction to potential issues with the Boeing 787 passenger jet.
Cash Cow Blue Chip Stock #3: Aetna Inc (AET)
Market capitalization: $30 billion
YTD performance: +26%
Health insurance provider Aetna Inc (AET), while by far the smallest company on this list of blue chip cash cows, is still throwing off some major greenbacks for AET investors. In mid-November, Aetna announced that it was adding $1 billion to its stock repurchase program, which had a measly $464 million remaining on it.
Not to be outdone, Aetna also increased its quarterly dividend by 11% to 25 cents per quarter. The new rate pegs the AET dividend at 1.2% annually at today’s prices. Shareholders of record on Jan. 15 will be paid the new-look quarterly dividend on Jan. 30, 2015.
It makes sense that Aetna is looking for ways to dish out cash: AET third-quarter revenue and earnings per share both beat expectations, and the stock currently trades just below all-time highs it reached earlier this month.
John Divine is assistant editor of InvestorPlace.com. As of this writing, he held no positions in any of the aforementioned stocks. You can follow him on Twitter at @divinebizkid.