In this article, we are going to discuss the 12 best blue chip dividend stocks to buy now.
Investors tend to favor dividend stocks when markets become difficult to navigate. Morningstar reported that in the first quarter of 2026, dividend ETFs, including funds focused on high-yield stocks and dividend growers, attracted nearly $22 billion in net inflows. That marked the strongest quarter for these funds since the second quarter of 2022.
Dividend income still appeals to many investors, though the environment has changed in recent years. Bond yields have moved above dividend yields, a major shift from 2021 before central banks around the world raised interest rates aggressively to fight inflation. Even with some rate cuts in 2025, borrowing costs remain high. Inflation is still running hot. The report also noted that income may not be the only reason investors are moving into dividend ETFs. Tough market conditions appear to be another key factor. During the first quarter of 2026, investor sentiment shifted from excitement around artificial intelligence to concerns about AI disrupting existing business models. Software-related industries, in particular, saw sharp sell-offs. That has renewed interest in dividend stocks.
Blue-chip dividend companies with strong fundamentals and healthy balance sheets can offer some protection during volatile periods. Christine Benz, Director of Personal Finance and Retirement Planning for Morningstar, stated in a separate report that “Even as dividend-payers have posted lower returns over the past few decades, their volatility has also been lower.” She pointed to the Vanguard High Dividend Yield Index ETF as an example.
Over the past 15 years, the fund posted a standard deviation of 13, while the Total Market Index recorded a standard deviation of 14.6. The year 2022 offered a clear example of that difference. While the Total Stock Market lost 19% that year, the dividend-focused ETF lost less than 1%.
With that said, here are the Best Blue Chip Dividend Stocks to Buy in 2026.
Photo by Viacheslav Bublyk on Unsplash
Our Methodology
To collect data for this article, we used our stock screeners to identify blue-chip stocks that are industry leaders in their respective sectors and boast a market cap of over $100 billion. We then shortlisted stocks that had an annual dividend yield of over 2%, as of May 12. We ranked these stocks by the number of hedge funds invested in them at the end of Q4 2025, as per the Insider Monkey database. Finally, we limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. The following are the Best Blue Chip Dividends Stocks According to Hedge Funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
12. Toyota Motor Corporation (NYSE:TM)
Number of Hedge Fund Holders: 20
Dividend Yield as of May 12: 3.44%
Toyota Motor Corporation (NYSE:TM) is a global automotive industry leader, manufacturing vehicles in 27 countries or regions and marketing the company’s products in over 170 countries and regions.
Toyota Motor Corporation reported an almost 50% YoY drop in profits in its Q4 profits on May 8, falling behind estimates as US tariffs and the intensifying competition from Chinese automakers pressured its earnings. However, the company’s revenue was in line with expectations after a 5% growth compared to last year.
Toyota Motor Corporation’s operating profit fell for a fourth consecutive YoY period, reflecting the persistent pressure from President Trump’s tariffs. The company’s consolidated vehicle sales in Q4 declined to 2.29 million units, from 2.36 million units in the year-ago period.
Given the market headwinds, Toyota Motor Corporation lowered its operating income forecast by over 20% for the ongoing financial year. The bulk of this hit is expected to come from the higher material costs, with the remainder from delivery delays and lower sales volumes.
11. HSBC Holdings plc (NYSE:HSBC)
Number of Hedge Fund Holders: 25
Dividend Yield as of May 12: 4.14%
HSBC Holdings plc (NYSE:HSBC) is one of the largest banking and financial services institutions in the world, serving millions of customers through its four global businesses.
On May 9, JPMorgan increased its price target on HSBC Holdings plc (NYSE:HSBC) from £1,360 to £1,370, while keeping a ‘Neutral’ rating on the shares. The revised target represents an upside of almost 3% from the current price level.
HSBC Holdings plc (NYSE:HSBC) reported mixed results for its Q1 on May 5. Europe’s largest lender reported pre-tax profit of $9.4 billion for the quarter, falling behind estimates on the back of higher expected credit losses and other impairment charges. However, the company’s revenue grew by over 5% YoY to $18.6 billion and exceeded expectations on stronger wealth fees and other income.
HSBC Holdings plc (NYSE:HSBC)’s expected credit losses surged to $1.3 billion, up $400 million compared with the same period a year earlier. The losses were driven by the “fraud-related” exposure to a financial sponsor in the UK and provisions owed to a worsening economic outlook due to the ongoing US-Iran war.
That said, HSBC Holdings plc (NYSE:HSBC) raised its banking net interest income guidance to around $46 billion for full-year 2026, up from its prior forecast of at least $45 billion, reflecting an improved interest rate outlook.
10. Enbridge Inc. (NYSE:ENB)
Number of Hedge Fund Holders: 26
Dividend Yield as of May 12: 5.23%
Enbridge Inc. (NYSE:ENB) is a midstream energy operator that focuses on transporting and distributing oil, natural gas, and natural gas liquids.
Enbridge Inc. had a strong start to the year, with the company reporting better-than-expected results for its Q1 on May 8. The midstream operator delivered an adjusted EPS of $0.72 against estimates of $0.69, while its revenue also grew by 23% YoY to $16.3 billion and comfortably topped forecasts by $3 billion.
The strong performance was driven by the rising demand for natural gas, utility infrastructure, and power supply for data centers. Moreover, since the beginning of the US-Iran war, Enbridge has witnessed an increase in demand for crude oil export capacity to its Ingleside export terminal, the largest crude oil storage and export terminal in the United States.
Enbridge Inc. reaffirmed its FY 2026 guidance for adjusted EBITDA between C$20.2 billion and C$20.8 billion and DCF per share in the range of C$5.70 and C$6.10. Moreover, the company reiterated its post-2026 outlook of a 5% average annual growth rate for EBITDA, DCF per share, and EPS.
Enbridge Inc. boasts an impressive annual dividend yield of 5.23% and holds the coveted title of a dividend aristocrat, having raised its annual dividend for 31 consecutive years. As a result, ENB was recently included in our list of the 15 Best High Yield Energy Stocks to Buy Right Now.
9. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 63
Dividend Yield as of May 12: 3.02%
International Business Machines Corporation (NYSE:IBM) is a provider of global hybrid cloud and AI and consulting expertise.
On May 7, RBC Capital trimmed its price target on International Business Machines Corporation from $330 to $300, while maintaining an ‘Outperform’ rating on the shares. The lowered target still indicates an upside potential of over 30% from the current price levels.
The move comes after RBC Capital attended IBM’s Think user conference, where the company’s management provided a revised strategic outlook, centered on its core pillars of hybrid cloud and AI, as well as the emerging quantum computing business. Moreover, the analyst added that the price target cut reflects peer multiple compression.
International Business Machines Corporation reported its Q1 2026 results last month, with the company delivering a revenue growth of 6%, adjusted EBITDA growth of 17%, and free cash flow growth of 13% compared to last year. Given the strong performance, the company remains confident in delivering constant currency revenue growth of over 5% and free cash flow growth of about $1 billion in full-year 2026.
8. Lowe’s Companies, Inc. (NYSE:LOW)
Number of Hedge Fund Holders: 66
Dividend Yield as of May 12: 2.12%
Next on our list of the Best Blue Chip Dividend Stocks is Lowe’s Companies, Inc. (NYSE:LOW). It is a home improvement company serving approximately 20 million customers a week in the United States
On May 5, BofA reinstated Lowe’s Companies, Inc. at ‘Neutral’, while assigning the stock a price target of $260, indicating an upside potential of over 13% from the current share price. The analyst firm previously had a ‘Buy’ rating on the shares.
BofA believes that Lowe’s Companies, Inc.’s risk/reward ratio is balanced at current levels, as the company’s earnings growth remains limited and there is no clear catalyst since the housing activity stays subdued.
Given the market headwinds, Lowe’s issued cautious guidance for FY 2026 back in February. The company is targeting its total sales for the year to be $93 billion at the midpoint, below the consensus estimate of $93.28 billion. Meanwhile, adjusted earnings are expected in the range of $12.25 to $12.75 per share, also falling short of the $12.94 consensus estimate.
That said, Lowe’s Companies, Inc. remains a favorite among hedge funds and was recently placed in our list of the 10 Best Housing Stocks to Buy in 2026.
7. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 72
Dividend Yield as of May 12: 2.45%
Wells Fargo & Company provides a diversified set of banking, investment, and mortgage products and services, as well as consumer and commercial finance.
On May 7, Phillip Securities upgraded Wells Fargo & Company from ‘Accumulate’ to ‘Buy’, while assigning the stock a price target of $98. The target represents an upside of almost 30% from the current price levels.
Wells Fargo & Company reported mixed results for its Q1 last month, beating profit estimates but falling behind revenue forecasts. The company increased its diluted earnings per share by 15%, revenue by 6%, loans by 11%, and deposits by 7% compared to a year ago. The bank expects total net interest income of approximately $50 billion in full-year 2026.
Wells Fargo & Company also declared a quarterly dividend of $0.45 per share on April 28 and currently boasts an annual dividend yield of 2.38%. WFC was also recently included in our list of the 12 High Dividend Stocks Picked by Billionaire Ray Dalio.
6. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 86
Dividend Yield as of May 12: 3.85%
Chevron Corporation (NYSE:CVX) manufactures and sells a range of high-quality refined products, including gasoline, diesel, marine and aviation fuels, premium base oil, finished lubricants, and fuel oil additives.
On May 4, Barclays analyst Betty boosted the firm’s price target on Chevron Corporation from $180 to $192, while maintaining an ‘Equal Weight’ rating on the shares. The raised target, which represented an upside of almost 4% from the current levels, comes after the company’s recent Q1 report reflected “resilient” operations and improving free cash flow, with momentum building into the second quarter.
Chevron Corporation exceeded estimates for its Q1 earnings on May 1, as its upstream business received a boost from the soaring oil prices amid the Middle East conflict. However, the company’s overall profit fell to its lowest level in five years, partly due to unfavorable timing effects tied to financial derivatives. Moreover, the oil and gas giant’s revenue of $48.6 billion also fell below estimates by $4 billion, despite a YoY growth of 2%.
Notably, Chevron Corporation also revealed that it is less exposed to the Middle East war compared to its peers, as less than 5% of its production comes from the region. The company’s total production surged by 15% YoY to 3.86 mboed, largely due to the Hess acquisition and growth in the US Gulf and the Permian Basin. The company reaffirmed its target of a 7% to 10% YoY increase in production in FY 2026, while keeping its CapEx plan unchanged at $18-$19 billion.
5. CVS Health Corporation (NYSE:CVS)
Number of Hedge Fund Holders: 88
Dividend Yield as of May 12: 2.88%
America’s leading health solutions company, CVS Health Corporation (NYSE:CVS) provides advanced health care from pharmacy services and health plans to health and wellness.
On May 8, Wells Fargo analyst Stephen Baxter slightly raised the firm’s price target on CVS Health Corporation from $102 to $103, while maintaining an ‘Overweight’ rating on the shares. The target boost reflects an upside of over 13% from the current price levels.
Wells Fargo remains constructive on the healthcare firm’s recently reported Q1 results and sees potential for upward revisions through the rest of 2026, given the conservative stance on Health Care Benefits guidance. The analyst firm is raising estimates based on the net favorable PYD and stronger PCW performance.
CVS Health Corporation reported strong results for the first quarter on May 6, exceeding estimates in both earnings and revenue. Moreover, the company raised its full-year 2026 profit guidance to a range of $7.30 to $7.50 per share, up from $7 to $7.20 previously. CVS now projects its full-year total revenues to be at least $405 billion, while its cash flow from operations is expected to be at least $9.5 billion.
4. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 91
Dividend Yield as of May 12: 2.71%
McDonald’s Corporation is the world’s leading global foodservice retailer with over 37,000 locations in over 100 countries.
On May 9, RBC Capital analyst Logan Reich lowered the firm’s price target on McDonald’s Corporation from $330 to $305, while maintaining a ‘Sector Perform’ rating on the shares. The trimmed target still reflects an upside potential of over 11% from the current levels.
The move comes after McDonald’s Corporation exceeded both profit and revenue estimates in its Q1 report on May 7. The company’s global comparable sales rose by 3.8%, compared to a 1% decline reported last year.
RBC Capital noted that McDonald’s Q1 results were strong relative to modest expectations, noting that the company gained market share among low-income consumers in the United States. However, the analyst warned that the foodservice retailer remains vulnerable to broader macroeconomic pressures.
McDonald’s Corporation CFO, Ian Borden, flagged a weaker start to Q2 due to the soaring fuel prices putting persistent pressure on low-income consumers and turning sales slightly negative in April. However, the company reaffirmed its full-year 2026 financial targets and reiterated its plan to expand to about 50,000 restaurants by the end of 2027.
3. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 98
Dividend Yield as of May 12: 2.75%
Exxon Mobil Corporation (NYSE:XOM) is one of the largest integrated fuels, lubricants, and chemical companies in the world.
On May 4, UBS increased its price target on Exxon Mobil Corporation from $171 to $174, while keeping its ‘Buy’ rating on the shares. The target boost, which reflects an upside of over 15% from the current price levels, comes as the analyst firm sees “multiple” levers to offset the oil and gas giant’s drop in production in Qatar amid the US-Iran war.
Exxon Mobil Corporation delivered better-than-expected earnings in its Q1 report on May 1, supported by the higher output in Guyana and the Permian Basin. However, the company’s net income dropped to its lowest level in five years due to global supply disruptions from the Iran war.
Exxon Mobil Corporation reported total worldwide production of 4.59 mboed for the quarter, up marginally from a year ago, but down nearly 8% from 5 million bpd delivered in the previous quarter. The company revealed that about 15% of its production is impacted by the Middle East war, and expects its production to fall by 750,000 bpd compared with 2025 if the Strait of Hormuz remains closed for the entire second quarter.
That said, the oil behemoth remains on track to grow its full-year Permian output to 1.8 million oil equivalent barrels in 2026.
2. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 98
Dividend Yield as of May 12: 2.99%
The Home Depot, Inc. (NYSE:HD) is the largest home improvement specialty retailer in the world, engaging in the sale of building materials and home improvement products. The company operates over 2,300 retail stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, Canada, and Mexico.
On May 5, BofA reinstated coverage of Home Depot, Inc. with a ‘Buy’ rating and a price target of $374, indicating an upside potential of 20% from the current share price.
The analyst firm called Home Depot, Inc. its preferred stock within the home improvement sector, citing the company’s strong comparable growth driven by higher Pro penetration. BofA expects the company’s customer traffic trends to remain more resilient than its competitors.
Home Depot, Inc. is projecting total sales growth of approximately 2.5% to 4.5% for FY 2026. Meanwhile, the company’s adjusted EPS growth is expected to range from flat to up 4% from the $14.69 delivered in FY 2025, reflecting a disciplined operating approach centered on cost control and steady demand capture rather than cyclical recovery assumptions. Home Depot is also targeting to open approximately 15 new stores in the ongoing year.
1. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 100
Dividend Yield as of May 12: 3.06%
Topping our list of the Best Blue Chip Dividend Stocks is Merck & Co., Inc.. It is a global health care company working to deliver innovative health solutions through our medicines, vaccines, biologic therapies, and animal health products.
On May 7, Citi analyst Geoff Meacham reinstated coverage of Merck & Co., Inc. with a ‘Neutral’ rating and assigned the stock a price target of $125, indicating an upside of over 12% from the current price levels.
The move comes after Merck & Co., Inc. exceeded topline estimates in its Q1 report posted on April 30, supported by the strong demand for its aging cancer immunotherapy Keytruda. Sales of the medicine surged 12% to $8 billion during the quarter, beating estimates of $7.6 billion. Citi views the healthcare firm’s Q1 report as strong, but wants to see favorable clinical catalysts and additional business development before recommending buying the stock.
On the other hand, earlier on May 1, Morgan Stanley analyst Terence Flynn turned more bullish on Merck & Co., Inc. and raised the firm’s price target on the stock by $3 (read more details here).
Baron Capital, an investment management company, stated the following regarding Merck & Co., Inc. in its Q1 2026 investor letter:
“We bought shares of Merck & Co., Inc., Inc., a large-cap pharmaceutical company. Merck’s largest product in terms of revenue is Keytruda, a cancer therapy which generated over $31 billion of revenue in 2025, representing close to 50% of the company’s revenue. Keytruda loses patent protection in 2028 which will result in biosimilar competition. Merck has been preparing to manage the impact of the Keytruda patent cliff through aggressive business development and pipeline investment. We think management has done a good job particularly with acquisitions and can effectively manage through this period. In fact, over the past five years Merck has acquired five companies which at the time the acquisition was announced the Fund owned, including Acceleron Pharma Inc. (in 2021), Prometheus Biosciences, Inc. (in 2023), Verona Pharma plc (in 2025), Cidara Therapeutics, Inc. (in 2025), and most recently, Merck announced its intent to acquire Terns Pharmaceuticals, Inc. (in March 2026). In addition, Merck also in-licensed ex-China rights to a portfolio of antibody-drug conjugates from Kelun Biotech in 2022, which includes sac-TMT, a very promising TROP2 targeting drug. Including internally developed drugs (such as the oral PCSK9), Merck is launching over 20 new growth drivers which represent a potential commercial opportunity of over $70 billion by the mid-2030s on a non-risk-adjusted basis. Over the next 12 to 18 months, the company will have multiple clinical data readouts across its portfolio, which should add visibility to the company’s ability to fill the sales and earnings gap when Keytruda loses patent protection. Merck trades at a valuation of 12 times through 2029 EPS and we think the multiple will expand as visibility on earnings growth beyond 2029 increases.”
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