Inflation rates have cooled to 3.7% from record 9% levels recorded last year, thanks to the Federal Reserve’s aggressive interest rate hikes over the past year. However, the median consumer price index still lies significantly above the Fed’s target 2% rate, implying further rate hikes down the road.
Given the precarious economic scenario, the Fed has temporarily paused rate hikes over the past couple of months, as the Federal Open Market Committee left rates unchanged since July of this year.
The volatile macroeconomic backdrop has kept prices sticky in several sectors, such as food and energy. Gas prices rose by 2.1% month-over-month in September and were a major driver behind inflation, according to the Bureau of Labor Statistics (BLS). As the crisis in the Middle East worsens, gas prices might continue to exert upward pressure on inflation levels in the near term.
Given this backdrop, investing in stable blue-chip dividend-paying stocks might mitigate the overall portfolio risk as well as provide supplemental income. Some of the top S&P 500 dividend-paying stocks follow.
Walgreens
With a market cap of nearly $20 billion, Walgreens Boots Alliance Inc. (NASDAQ:WBA) is one of the largest drugstore chains in the U.S. It accounts for nearly 20% of total prescription revenues in the U.S., as almost three-quarters of Americans reportedly live within five miles of a Walgreens store.
The company has an over 90-year dividend payout history, as it has distributed dividends to shareholders for 362 consecutive quarters.
An S&P 500 constituent, Walgreens has raised its dividend payments for 47 years in a row, making it one of the most popular dividend aristocrat stocks. The latest hike was announced last July when Walgreens raised its quarterly dividend payout by 0.5% year-over-year to 48 cents per share.
The retail drug store chain pays $1.92 per share annually, yielding 8.93% on the current share price. While WBA stock has been beaten down by market headwinds over the past year, analysts expect it to recover soon, making it an ideal undervalued stock. JP Morgan analyst Lisa…
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