Stocks to buy

High uncertainty may continue to loom over the stock market, but that doesn’t mean you need to stay on the sidelines. Instead, keep your eyes on the long-term, with solid additions to your portfolio, such as the best blue-chip stocks to buy and hold.

These high-quality names have historically provided investors with solid total returns. First, through steady dividend payouts that grow over time. Most of these top blue-chips are “dividend aristocrats,” with over 25 years of consecutive dividend growth. Some of them are even “dividend kings,” with dividend growth track records spanning 50 years or more.

Second, along with these dividends, these types of stocks gradually appreciate in value over time. You may not get rich quickly with them, but over an extended timeframe, you have the opportunity to build wealth. So, what are the best blue-chip stocks to buy and hold for the coming decades? Consider these seven, all of which are safe harbors in the near-term, solid winners for your portfolio in the long-term.

ADP Automatic Data Processing $212.33
CINF Cincinnati Financial $105.90
JNJ Johnson & Johnson $153.29
LMT Lockheed Martin $466.52
MDT Medtronic $77.62
PEP PepsiCo $175.02
UNH UnitedHealth $461.25

Automatic Data Processing (ADP)

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Automatic Data Processing (NASDAQ:ADP) is best known as being the world’s largest payroll processor. Given that, in good times and bad times, employers need to meet payroll, ADP is a steady, recession-resistant business.

Thanks to this consistency, it’s no wonder ADP stock is on the verge of becoming a dividend aristocrat. The company has raised its dividend payout 24 years in a row. Shares today have a forward yield of 2.34%. While this may not sound high, over the past five years, this rate of payout has grown by an average of 13.8% annually.

Investors who have long held ADP, and have reinvested these payouts into additional shares, have generated strong returns. Past performance is not indicative of future results, but per dqydj.com’s stock return calculator, ADP has generated total annualized returns of 10.8% over the past 25 years.

Cincinnati Financial (CINF)

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Cincinnati Financial (NASDAQ:CINF) may not be one of the best-known property and casualty insurers, but among insurers, it may be for some investors one of the best blue-chip stocks to buy and hold. Admittedly, CINF stock has only slightly beaten the market over a long time frame. Over the past 25 years, CINF has produced annualized total returns of around 7.5%, whereas the S&P 500 (with dividends reinvested), has produced annualized returns of 7.2% during this time frame.

However, while perhaps not a standout choice for capital growth, CINF is a great choice for dividend-focused investors. As SureDividend.com has pointed out, CINF is one of just 13 stocks that has raised its dividend more than 60 years in a row. With a current forward yield of 2.7%. The company has raised this payout by an average of 6.65% over the past five years.

Johnson & Johnson (JNJ)

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Johnson & Johnson (NYSE:JNJ) is another of the blue-chips sporting a dividend growth track record of at least sixty years. The recession and inflation-resistant nature of JNJ’s diversified health care business has enabled it to achieve this in prior decades. The company is poised to continue with this tradition during today’s challenging times, as well as in the decades to come. JNJ stock right now has a forward yield of 2.94%, and the company has grown its payout by an average of 6.11% annually over the past five years.

Sure, JNJ’s near-term share price performance has been subpar. Yet while JNJ’s recent double-digit drop may at first seem concerning, this is likely to be just temporary. Trading at the low end of its historic valuation at 15 times earnings, forecasts calling for consistent earnings growth over the next two years point to shares getting back on track.

Lockheed Martin (LMT)

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With only 20 years of consecutive dividend growth under its belt, Lockheed Martin (NYSE:LMT) has yet to gain “dividend aristocrat” status. However, don’t assume that means that LMT isn’t one of the best blue-chip stocks to buy and hold. Given that the defense contractor’s dividend payout ratio is only 41.6%, there’s a good chance it continues to raise its payout over the next five years, which will then place LMT stock in the dividend aristocrats category. Shares today have a forward yield of 2.51%, and the payout has grown by an average of 8.71% annually for the past five years.

Furthermore, Lockheed Martin’s business may now be even better-positioned to thrive in the coming years, and not just because of current conflicts such as Russia’s Ukraine invasion. With tensions between the U.S. and China rising, the Biden administration is looking to boost military hardware spending.

Medtronic (MDT)

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If you’re looking for a blue-chip offering a moderately-higher yield, Medtronic (NYSE:MDT) may be a great choice. Shares in the medical device maker, domiciled in Ireland but operating globally, currently have a forward dividend yield of 3.49%.

MDT stock also has a 9-year track record of dividend growth. It may be more than a decade away from achieving “dividend aristocrat” status, but with payout growth averaging 8.1% annually over the past five years, more dividend increases may be in store. Yes, there have been some concerns about future earnings growth recently.

However, as a Seeking Alpha commentator has recently argued, as near-term headwinds resolve, and management pivots to higher-growth segments of the industry, Medtronic could experience a growth resurgence. Besides enabling MDT to continue raising its payout, this may also result in multiple expansion for the stock, which today trades for only 14.8 times forward earnings.

Pepsico (PEP)

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Pepsico’s (NASDAQ:PEP) status as one of the blue-chip stocks to buy and hold is self-evident. With 50 years of dividend growth, PEP is a bona fide “dividend king.” Operating in the consumer staples sector, the company is able to generate steady earnings that keep up with inflation.

PEP stock has outperformed the S&P 500 over the past 25 years, generating annualized total returns of 8.28% during this timeframe. More impressively, PEP’s 25-year performance has handily beat that of its main peer, Coca-Cola (NYSE:KO). Since 1998, KO stock has generated total annualized returns of just 4.47%. As I’ve argued before, PEP has KO beat when it comes to the sweetest cola stock to buy and hold. Although both trade at similar valuations, and KO offers a higher dividend yield (3.07% versus 2.65%), PEP has greater earnings and dividend growth potential.

UnitedHealth Group (UNH)

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Over the past 25 years, UnitedHealth Group (NYSE:UNH) has delivered stunning returns to investors. Over this time frame, annualized returns for the health insurance and healthcare services giant have come in at 18.45%.

Future returns may be more modest, but UNH stock still has a path to generate double-digit annualized returns from here. First, via earnings growth. Forecasts call for UNH’s earnings to rise by 17.7% this year and 13.5% next year. Assuming shares rise in tandem with earnings growth, this alone could generate double-digit gains.

In addition, potential future returns for UnitedHealth Group keep rising, as the company becomes more of a dividend-payer. UNH’s forward yield may only be 1.42%, but this payout has grown by an average of 17.1% annually for the past five years. A low payout ratio (28.84%) points to more room for such high dividend growth.

On the date of publication, Thomas Niel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.

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