Time To Buy These 4 Blue Chip Dividend Stocks

For the stock market, 2016 has started off with a solid “thud.” In just the first month of the year the S&P 500 is down 7%. In the income focused sectors, the Energy Select Sector SPDR ETF (NYSE: XLE) is down 7%, the Alerian MLP index has lost 13% and the SPDR Dow Jones REIT ETF (NYSE: RWR) is down 4.5%. The REIT ETF is down 10% in the last three months. General market declines like this put every stock on sale and times like these are an opportunity to pick up shares of the most popular income stocks at a lower price/higher yield than you will typically find.

In every business sector there are those stocks that do a very good job for investors and are widely owned. These companies are great businesses, with tremendous track records compared to their peer group. In most market conditions the popularity of these stocks results in a high share price based on earnings metrics, and a lower yield if we focus on income stocks. In my research, I tend to use these super Blue Chip stocks as benchmarks against which I strive to dig out less popular stocks with more attractive valuations and higher yields. However, when the market is selling off across the board, it can be a good time to pick up shares of these popular income stocks to lock in a much higher than typical yield and participate in the company’s future dividend growth. Here are four blue chip income stocks that we can classify as “on sale” after the recent market declines.

Realty Income Corp (NYSE: O) is in a class by itself when it comes to REIT dividend stability. Calling itself “The Monthly Dividend Company,” Realty Income has paid a dividend for 546 straight months and has grown the dividend by a compounding 5% per year for 22 years. A recent dividend increase announcement has pushed up the O share price compared to a few months ago. However, the current share value is almost even to where it was one year ago and in the meantime, the monthly dividend rate has increased by 8.2%. The stock currently yields 4.3% and is a buy on any further price correction in 2016.