In this article, we will take a look at the 5 Best Blue Chip Dividend Stocks to Buy Now. For deeper discussion and analysis, please refer to the 12 Best Blue Chip Dividend Stocks to Buy Now.
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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 (NYSE:CVS) 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 (NYSE:CVS) 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 (NYSE:MCD) 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 (NYSE:MCD) 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 (NYSE:MCD) 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 (NYSE:MCD) 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 (NYSE:XOM) 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 (NYSE:XOM) 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 (NYSE:XOM) 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. (NYSE:HD) 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. (NYSE:HD) 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. (NYSE:HD) 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. (NYSE:MRK). 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. (NYSE:MRK) 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. (NYSE:MRK) 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. (NYSE:MRK) 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. (NYSE:MRK) in its Q1 2026 investor letter:
“We bought shares of Merck & Co., Inc. (NYSE:MRK), 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.”
While we acknowledge the potential of MRK to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MRK and that has 100x upside potential, check out our report about the cheapest AI stock.
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