Blue-Chip Stocks Break Through Expectations with Strong Returns and Dividends

Investors often overlook blue-chip stocks in favor of growth-oriented investments, but this year has seen several stalwarts deliver strong returns and growing dividends. One reason for their success is sector rotation, as investors seek gains outside the artificial intelligence trade. Energy and biotechnology have been among the sectors that have performed well.

Coca-Cola (KO) is a prime example of a blue-chip stock that has outperformed expectations. The company's strong brand, consistent growth, and growing dividend have attracted legendary investor Warren Buffett, who has owned shares for decades. KO has delivered a total return of around 177% over the last ten years, including reinvested dividends.

Chevron (CVX) is another energy stock that has benefited from sector rotation. The integrated oil company has tailwinds from its existing portfolio and plans to expand in Venezuela. Chevron has increased its dividend for 38 consecutive years and currently yields 3.32% with a payout of $7.12 per share annually.

Merk & Co. (MRK) rounds out this group of blue-chip stocks that have outperformed the S&P 500 this year. The company's blockbuster oncology drug, Keytruda, accounts for over 55% of its pharmaceutical sales. Merck has a deep pipeline and recently delivered positive top-line data in a Phase 3 study.