As the stock market pulls back from recent highs, it may cycle gains into steadier, more defensive stocks, such as blue chip dividend stocks. From their earnings and dividend consistency to their strong track records of dividend growth, these stocks can be highly attractive during near-term volatility, yet they can also deliver strong long-term total returns.
Right now, these three dividend stocks stand out as names worth buying for yield, dividend growth, and long-term appreciation potential: Johnson & Johnson (NYSE: JNJ), Coca-Cola (NYSE: KO), and ExxonMobil (NYSE: XOM).
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Dividend King Johnson & Johnson remains a top choice
Johnson & Johnson is one of the Dividend Kings, or stocks with at least 50 consecutive years of dividend growth. For the past 65 years, the healthcare company has raised its quarterly cash payout. Over the past decade, these annual increases have averaged around 5.7%.
Currently, the stock has a forward dividend yield of around 2%. That may not sound particularly high, but over time, these payouts will become an increasingly larger contributor to total returns.
Much suggests that Johnson & Johnson can sustain mid-single-digit annualized dividend growth. Over the past few years, the company has jettisoned slower-growing segments. Most notably, its consumer products unit was spun off as Kenvue back in 2023.
At the same time, J&J has pivoted toward faster-growing segments of healthcare, such as oncology. Last quarter, the company’s Tremfya psoriasis treatment reported 73% sales growth, generating $2 billion in revenue. Johnson & Johnson has also reached a long-awaited resolution to its talc product liabilities, with a recently announced $5.5 billion settlement.
All this could pave the way for the company’s earnings to rise in line with analyst estimates. In 2026 and 2027, forecasts call for earnings growth of 8.2% and 9.8%, respectively. Such growth provides plenty of room for further dividend increases. It could also help the stock sustain its low-20s forward earnings multiple, in turn enabling shares to keep rising in tandem with earnings growth.
Don’t expect Greg Abel to let go of Coca-Cola anytime soon
Since taking over from Warren Buffett as CEO of Berkshire Hathaway in January, Greg Abel has made some major changes. However, one you shouldn’t expect Abel to make concerns one of the company’s best-known holdings: Coca-Cola.
