The following content is not a personal recommendation to buy shares in the companies listed as I am not taking your personal financial situation into account.

20 Blue Chip Companies That Pay Above Average Dividends and Could Thrive in the Coming Year

Gaining a higher return on investment can often come from buying great quality companies when they are out of favour with the market. 2020 was been an extraordinary year, never in our lifetime have we experienced a pandemic and this has favoured some notable stay at home, work from home companies and clearly disadvantaged many other businesses in the travel, leisure, energy, oil and hospitality industries as the global economy came to a grinding halt and a global recession took a hold.

Recently we have seen a handful of drug manufacturers announce that their vaccines are showing positive results and there is now a influx of new money coming into the market for some of the out of favour companies, many of which pay dividends.

So, it begs the question. Are there any great quality companies that have been out of favour with the market, that are trading below fair value, stand to benefit from a vaccine and pay above average dividends?

Following is a list of companies that offer above average annual dividend returns and also have the potential to rise in value throughout the coming years as global economic output improves.  

The criteria in coming up with the companies listed below was… 

  • It must be a business that 90% or more of people instantly recognise and understand what the company does.
  • It is currently trading at or below what I consider to be fair value.
  • Has the potential to rise in price back to pre COVID-19 levels once economic output improves. 
  • Is widely available on all brokers platforms.
  • Is listed on the ASX 200, Nasdaq or S&P 500.

Australian companies

CompanyAnnual DividendIndustry
Fortescue Metals Group5.38%Mining
Bendigo and Adelaide Bank6.75%Banking
IOOF Holdings6.53%Financial Services
AGL Energy4.77%Energy
Woodside Petroleum5.00%Oil
Aurizon Holdings5.28%Transport
Flight Centre Travel Group4.38%Travel and Leisure
Rio Tinto Ltd.4.98%Mining
Coles 4.61%Consumer Staples
Origin Energy 5.2%Energy

USA companies

CompanyAnnual DividendIndustry
Exxon4.62%Oil
Dow Inc5.37%Packaging and Plastics
Chevron4.29%Oil
IBM   5.51%Technology
Boeing  2.59%Aircraft Manufacturing
Pfizer 3.62%Pharma
Verizon4.43%Telecommunications
Walgreens2.60%Consumer Staples
Coca Cola3.22%Beverages
JP Morgan2.57%Banking

But before you go and invest in these companies, let me warn you…

Buying a company just for a dividend is not reason enough!

In fact, there are many companies here, that despite having an above average (even great) dividend… that I wouldn’t touch.

Why?

Because dividends are just a small part of the puzzle.

You see, one of the biggest mistakes that novice investors make, is buying a company based on 1 or 2 pieces of information (or a ‘gut’ feeling).

Take Telstra as an example… 

Despite paying great dividends, and being a household name (that is owned by many Australian investors and funds), its price has continued to plummet, year after year. 

So how do you make intelligent investment decisions?

The key to becoming a smart investor and the best opportunity for building a portfolio of valuable companies that reward you with above average returns… 

The key to becoming a smart investor and the best opportunity for building a portfolio of valuable companies that reward you with above average returns… 

Even better still, is if you can buy them when they are ‘on sale’ and trading below ‘fair market value’ (I explain what this means and how to do it in my free trainings). 

So, let’s get you started building your own Systematic Approach to Intelligent Investing with …

10 Questions and Criteria to Outperform the Market 

  1. You need to understand the business.
  2. What is the company’s competitive advantage?
  3. Who are its biggest competitors?
  4. Is it a leader in its industry?
  5. What do the financials say about the company?
  6. Have the earnings and dividends been rising or falling? 
  7. Would you be ok if you couldn’t see the share price for 12 months? If not, you are looking at the wrong company.
  8. Is the company trading at 15% or more discount?
  9. Are you buying it when its cheap or expensive. Above or below fair value? Do you even know what this means?
  10. You need to understand who is the CEO, who is on the board? They are the custodians of your money when you buy. 

These are key questions we ask and answer before buying any company no matter what dividend pays.

You can start using these questions and criteria today to better evaluate companies you are looking to invest in. Don’t worry if you don’t understand them all, or if you feel overwhelmed. Just have a read of them for now, and think how they might apply.

I go into more detail and actually walk you through the process in my free live and recorded trainings. 

What to do now?

The next step is to register for my FREE ‘Intro to Investing’ Mini Course. 

It’s made up of 7 short (5 minute) video lessons that you can watch today. Instantly. 

It will give you a great introduction to making Intelligent Investment Decisions. And will get you started on the path to finding and evaluating high-quality, growth companies that will likely thrive and continue to outperform in the years ahead… that are currently trading at 15% or more below fair market value.

Just enter your details below and learn how to start growing your investment portfolio today. 

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