There are no guarantees in the stock market. But there is history on your side. Over the past 50 years, the S&P 500, an index of 500 large companies publicly traded in the United States, has provided an average total return of 10% per year.
Total return combines dividend payouts and share price movement. Here are three quarterly dividend blue chips to consider. Each is paying a higher yield right now than the S&P 500's current rate of 1.69% or its historic average of 1.85%.
Two of them are among the exclusive club of the S&P 500's Dividend Aristocrats: companies that have raised their dividend at least once a year for at least 25 consecutive years. And the other is a Dividend King with 54 straight years of payout increases.
1. Consolidated Edison
Consolidated Edison (ED 0.96%) is the prototype of venerability and stability in this genre. Con Ed is the longest continuously listed company on the big board, going back to 1824 as the New York Gas Light Company.
The company has a regulated monopoly providing electricity, gas, and steam to about 3.5 million customers in New York City and Westchester County, New York. Its business can only grow as fast or slow as the size of its customer base, but Con Ed isn't really a growth stock.
Con Ed instead is a classic "widow and orphan stock", the kind of mature stalwart in a non-cyclical business that reliably produces income and some share price growth over time. In this case, Con Ed's price has risen by 233% since 1990, including a 29% year-over-year jump that has pushed its yield to a 30-year low of 3.3%.
There are stocks that offer higher yields and/or more share price growth potential but that's not the point of buying Con Ed. This is a good candidate for the low-risk, reliable income portion of any retirement portfolio.
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2. Essex Property Trust
Essex Property Trust (ESS 0.51%) doesn't have a monopoly as Con Ed has, but it does have market forces on its side. This real estate investment trust (REIT) rents out about 62,000 apartments in eight major markets in California and Seattle.
These are in some of the wealthiest metro areas, and demand for its upscale apartments has allowed Essex to boostpost rent growth by 18% to 20% while boosting its core funds from operations (FFO) by 21% year over year.
Continued job growth and demand in these hot markets should help build on its record of 29 straight years of dividend increases that now have its stock yielding about 3.2%. That yield also is at a 30-year low, despite the company raising the dividend by 25% in the past five years.
A high share price is a big part of that, and it's down about 22% so far this year. This could be a buy opportunity to consider on share price alone. A dividend payout ratio of about 63% based on cashflow also leaves room for the company to boost the dividend more, too.
3. Federal Realty Investment Trust
Federal Realty Investment Trust (FRT 1.26%) is a retail REIT that is not just a Dividend Aristocrat, it's a Dividend King with more than 50 consecutive years of annual dividend increases (54 to be exact). That's been funded by revenue from a collection of 104 properties in urban mixed-use properties concentrated in upscale areas in California, Maryland, and Massachusetts, among other states.
Federal Realty last raised its dividend by a penny in the third quarter of 2021 and is now yielding about 4.1%. With high leasing rates, diversification into office space and multifamily housing, and a strong redevelopment pipeline, more dividend boosts can be expected. After all, who wants to be the CEO and board that end that streak?
There are higher yields available, but these are safe options
There certainly are gaudier yields available in the market from very stable companies with equally strong prospects. But if you want history on your side, it's hard to argue against adding some shares of this trio of dividend stalwarts. I don't own any now but plan to soon.