3 Dividend Stocks to Buy Hand Over Fist

Nobody enjoys seeing the stock market decline, but bear markets can be a long-term blessing for investors, especially those looking for passive income.

Dividend yields increase when stock prices decrease, giving investors more bang for their buck.

Remember to always focus on buying quality stocks; here are three blue chips on sale that you can buy hand over fist.

1. Intel

Semiconductors are the building blocks of technology, little chips that make electronics work, from your computer to your car. Intel (NASDAQ: INTC) is one of the world’s leading chip companies. It invented x86 processor chips, one of the world’s most commonly used chip architectures, and owns 63% of the global market for them.

Intel has paid and raised its dividend for the past eight years; investors can get a 4% yield at the current share price. Its dividend payout ratio is just 58%, so it’s not an enormous financial burden.

INTC dividend. Data by YCharts.

The stock trades at a price-to-earnings ratio (P/E) of 10, a lower valuation than its median P/E of 13 over the past 10 years. Intel’s prospects are also promising; the company is spending billions to build production capacity in the United States, turning it into a leader in chip manufacturing.

Analysts expect Intel’s earnings per share (EPS) to grow by 7% annually over the next three to five years, supporting continued dividend increases. 

2. 3M Company

Consumers typically see nothing but finished goods on store shelves, not realizing the many little components that go into making them. 3M Company (NYSE: MMM) produces many of them; the industrial conglomerate makes over 60,000 products, including window film, Post-it notes, and respirator masks.

The company’s strong brand and diverse products have made it a reliable dividend stock; its payout has been raised annually for 65 consecutive years, making it one of the few active Dividend Kings. Investors can grab a 4.6% yield today, supported by a healthy 67% dividend payout ratio.

Analysts are optimistic about 3M, calling for EPS growth averaging almost 10% per year over the next three to five years.

MMM dividend. Data by YCharts.

3M’s industrial roots could make it vulnerable to a recession, but management has navigated multiple economic scenarios to maintain its dividend growth streak and is poised to continue that. The company has $3.3 billion in cash and a leverage ratio of just 1.9 times EBITDA (earnings before interest, taxes, depreciation, and amortization). Investors should sleep well at night owning this proven blue chip. The stock trades at a P/E of just 13 against its decade median of 20.

3. T. Rowe Price Group

You might use T. Rowe Price Group (NASDAQ: TROW) financial products and not even realize it. It operates many of the mutual and exchange-traded funds investors use and offers wealth management and advisory services. It makes money by charging a percentage of its assets under management (AUM), which grow from an increase in market value or from new money from investors.

T. Rowe Price is a Dividend Aristocrat, a member of the S&P 500 that’s increased its dividend annually for at least 25 consecutive years — 36 years in this case. The dividend yield is excellent at almost 4.2%, and investors get an occasional special dividend, a nice bonus.

Analysts believe profits will grow 6% annually over the next three to five years, giving dividend investors some peace of mind.

TROW Dividend. Data by YCharts.

The stock market has historically increased over time, which bodes well for T. Rowe Price’s business outlook. The market steadily growing AUM increases how much revenue the company makes. A bear market or other sharp plunge in market values of T. Rowe’s AUM could hurt the business, but it has $2 billion in cash on hand against zero debt. Meanwhile, the stock is on sale with a P/E of 9 against its median of 16 over the past 10 years.

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel. The Motley Fool recommends 3M and recommends the following options: long January 2023 $57.50 calls on Intel and short January 2023 $57.50 puts on Intel. The Motley Fool has a disclosure policy.

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