The Ides of March? Amid the recent fluctuations in the market, some blue chip stock bargains are emerging as standout opportunities.
In the past few weeks, the broader market has experienced a notable shift toward a correction. The S&P 500 index has declined by approximately 10% from its recent peak, while the technology-heavy Nasdaq Composite has seen a drop of around 14%. It’s important not to panic; market drawdowns are a typical part of long-term investing, especially following an impressive rally that began early in 2023. Historical data shows that corrections often pave the way for future gains.
When market sentiment turns negative and fear spreads, it can often signal an opportune moment to search for attractive investment deals. Following the wise words of the legendary investor Warren Buffett, it’s beneficial to be cautious when others are overly optimistic and to seek opportunities when others are consumed by fear.
Here are three remarkable blue chip dividend stocks that investors should consider adding to their portfolios right now.
Lower Interest Rates Could Propel This Leading REIT to New Heights
Realty Income (O 1.49%) is recognized as a prominent real estate investment trust (REIT). This company specializes in acquiring and leasing properties to a variety of consumer-oriented tenants, including retailers, grocery stores, convenience stores, and pharmacies. By law, Realty Income, like other REITs, is required to distribute at least 90% of its taxable income to shareholders, which positions it as an attractive option for dividend investors. Currently, the stock offers a yield of 5.6%, and its management has consistently increased the dividend for an impressive 32 consecutive years, showcasing a robust commitment to returning value to shareholders.
Although the stock has faced challenges in recent years, with shares down by 25% from their previous highs, Realty Income remains resilient. The company relies on borrowing funds to finance new property acquisitions, and higher interest rates in recent years have posed significant challenges. However, Realty Income has managed to grow its funds from operations per share by nearly 12% over the past three years, indicating its ability to thrive even amidst stock price declines.
Currently, Realty Income is trading at just over 13 times its operating cash flow, which is close to the lower end of its ten-year historical range. With the current administration focusing on lowering interest rates, this could potentially enhance Realty Income’s business prospects as debt becomes more affordable. Additionally, in an uncertain market, steady dividend stocks like Realty Income may attract more attention from investors, making this stock a compelling buy opportunity at present.
Invest in This Railroad Stock as Tariff Issues Create Buying Opportunities
The ongoing tariff disputes between the United States and Canada have taken center stage in financial news. Canadian National Railway (CNI 1.86%) has felt the impact of these developments, with its shares experiencing a decline of nearly 30% from their peak value. As one of North America’s premier railroads, Canadian National Railway operates in a wide-moat industry characterized by sustained demand over decades. Its expansive rail network spans 18,800 miles across both Canada and the United States, enabling the transportation of significant quantities of essential resources, including petroleum, chemicals, grains, and various other goods.
Railroads continue to be the most efficient means of transporting these commodities, and this trend is unlikely to change in the foreseeable future. However, the current tariffs and looming recession fears may introduce short-term volatility for the company. Fortunately, Canadian National Railway is backed by exceptional management that has successfully navigated through previous periods of market turbulence, as evidenced by its remarkable 29 consecutive years of annual dividend increases.
At present, Canadian National Railway boasts a dividend yield of 2.55%, marking its highest level since the global financial crisis of 2008. Analysts project that the company will achieve an average earnings growth rate of 9.6% annually over the long term. Additionally, the dividend is well-supported, with a payout ratio of only 44% of estimated earnings for 2025. Given that the stock’s recent price decline appears more like background noise rather than a fundamental issue, this could be an excellent time to consider purchasing the dip.
Take Advantage of Discounted Prices in This Real Estate Dividend Stock
Carlisle Companies (CSL 2.90%) may not be widely recognized by consumers, but it holds a prominent position within the real estate industry. Carlisle Companies specializes in the sale of construction and waterproofing materials specifically for commercial buildings. This business has demonstrated consistent growth over the decades, driven by ongoing commercial construction activity across the U.S. With the average commercial property in America exceeding 53 years in age, the upcoming needs for efficiency upgrades and remodeling present significant growth opportunities for the company.
Despite the stock experiencing a decline due to recession fears, it’s important to note that an economic slowdown may only temporarily hinder investments in commercial properties. The long-term growth trajectory for Carlisle Companies remains robust, and its management has proven adept at navigating various economic cycles. The company has successfully raised its dividend for an impressive 48 consecutive years, enduring multiple recessions, elections, and crises.
Looking ahead, Carlisle Companies appears well-positioned for substantial long-term growth. Analysts forecast that the company will achieve an average earnings growth rate of 15% annually over the next three to five years. Furthermore, management aims to increase earnings per share from approximately $20 in 2024 to over $40 by 2030. Currently, the stock is trading at just 15 times the 2025 earnings estimates, providing a compelling investment opportunity given the anticipated growth and attractive valuation. Investors should seriously consider adding Carlisle Companies to their stock portfolios.
Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Realty Income. The Motley Fool recommends Canadian National Railway. The Motley Fool has a disclosure policy.