In this article, we will take a look at some of the best blue-chip dividend stocks to build a passive income portfolio.
The idea of generating passive income is gaining traction rapidly. According to a report by Hostinger, side hustles are seeing growing interest as a way to earn extra money alongside main jobs.
The web company conducted a survey to keep tabs on industry trends. The survey revealed that affiliate marketing is one of the most popular side hustles to generate passive income. The consumer interest could be seen from the industry’s current value of $18.5 billion. Moreover, affiliate marketing statistics reported that more than 80% of businesses integrate affiliate marketing into their digital strategy. Amazon’s affiliate program holds a 46.2% share, leading the market.
Affiliate marketing, however, requires some effort, but investing is one of the most proven ways to earn passive income while you sit back and relax. In this regard, investors often turn to dividend stocks. Akeiva Ellis, a financial planner and founder of The Bemused, made the following comment:
“Dividend income is definitely one major source of passive income that a lot of my clients have. Of course, there’s the appreciation and the capital gains that everybody is familiar with. But selecting companies that also give dividends to their shareholders on a regular basis is another part of the whole investment portfolio where you’re able to get income out of it as well.”
Given this, we will take a look at some of the best dividend stocks to build a passive income portfolio.
Our Methodology:
For this article, we screened for companies with a market capitalization of at least $10 billion. From that group, we identified dividend-paying companies that have raised their dividends for at least 10 consecutive years. The final list was arranged according to the number of hedge funds having stakes in the companies, according to Insider Monkey’s database of Q3 2025.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
15. MPLX LP (NYSE:MPLX)
Number of Hedge Fund Holders: 12
MPLX LP (NYSE:MPLX) is among the best dividend stocks to build a passive income portfolio.
JPMorgan reduced its price target on MPLX LP (NYSE:MPLX) to Neutral from Overweight on December 1 and maintained a $57 price target. The firm mentioned that the stock has already surpassed its peers in 2025, leaving less room to grow. The analyst also highlighted a few near-term catalysts and said that risk/reward appears to be more balanced now, which led to the downgrade.
In addition to working on several growth projects, MPLX LP (NYSE:MPLX)’s major focus is on strengthening its Permian-to-Gulf Coast network. The company is actively investing in long-distance pipelines that would transfer natural gas and natural-gas liquids from the Permian Basin to export facilities along the Gulf Coast. Through these developments, the partnership is expected to boost its cash generation.
MPLX LP (NYSE:MPLX)’s energy asset base, which includes oil pipelines, gas processing plants, and storage terminals, contributes generously to the company’s already growing cash flow due to regulated rate structures and long-term contracts. In the first nine months of the year, the company reported a cash flow of $4.3 billion, which comfortably covered its dividend. The partnership has also rewarded shareholders with growing dividends for the past 12 consecutive years.
MPLX LP (NYSE:MPLX) is a master limited partnership that owns a range of midstream energy assets.
14. Realty Income Corporation (NYSE:O)
Number of Hedge Fund Holders: 27
Realty Income Corporation (NYSE:O) is one of the best dividend stocks to invest in.
On December 3, Barclays boosted its price target on Realty Income Corporation (NYSE:O) to $64 from $63 while keeping an Equal Weight rating. The firm updated its net lease forecasts following the company’s Q3 earnings and recent transaction announcements.
Realty Income Corporation (NYSE:O) has steadily transformed over the years. The company, which started off as a REIT focused on US retail properties under long-term net leases, has now grown into a more diversified platform. Its portfolio now consists of a wide range of investments, which has benefited its overall market opportunity.
Realty Income Corporation (NYSE:O) largely concentrated on retail and industrial properties in the US and the UK five years ago. Since then, it has entered seven additional European countries, added gaming assets, and data centers. In addition, the company also opened avenues in offering credit solutions such as real estate-backed loans and preferred equity.
These moves have brought diversification to its portfolio. Realty Income Corporation (NYSE:O) now owns over 15,500 properties leased to more than 1,600 clients across nine countries.
13. Essex Property Trust, Inc. (NYSE:ESS)
Number of Hedge Fund Holders: 29
Essex Property Trust, Inc. (NYSE:ESS) is one of the best dividend stocks to build a passive income portfolio.
On November 24, Mizuho raised its price target on Essex Property Trust, Inc. (NYSE:ESS) to $284 from $275 and reaffirmed its Outperform rating. The update came as the firm revised its REIT models following the company’s Q3 earnings.
As Essex Property Trust, Inc. (NYSE:ESS) operates as a REIT, it must distribute 90% of its taxable income to shareholders through dividends. The company’s payouts have climbed in recent years due to a steady growth in its earnings. Over the past decade, ESS has nearly doubled its dividend, and its 4.9% dividend hike in 2025 has comfortably surpassed inflation.
What mainly drives Essex Property Trust, Inc. (NYSE:ESS)’s performance is its inclination toward high-demand West Coast markets, where rent growth has been stronger than average. From a dividend point of view, the company maintains a conservative payout ratio and a strong balance sheet, which offer it more room to maintain its dividend and scale up its apartment portfolio. ESS has been growing its dividends for 31 years running.
Essex Property Trust, Inc. (NYSE:ESS) is a residential-focused REIT that develops, owns, and manages apartment communities across the West Coast.
