Social Security’s 2027 COLA Raise Is the Biggest in 3 Years — But These 5 Dividend Stocks Pay You More

Social Security’s 2027 cost-of-living adjustment (COLA) is currently projected to come in at 3.6%, according to estimates from the Senior Citizens League. That would be 0.8 percentage points higher than this year’s 2.8% COLA. If the projection holds, it would mark the largest annual adjustment in Social Security payments since 2023. The average retired worker received about $2,071 a month in Social Security benefits as of January, so a 3.6% COLA would raise that by roughly $75, to around $2,146 a month starting in 2027.

Seniors should note the estimate isn’t final. The Social Security Administration won’t announce the official 2027 adjustment until October 14, once September’s CPI report is available. Other forecasters have landed slightly lower: an independent analyst, Mary Johnson, has projected the 2027 COLA at around 3.4%, while AARP’s most recent estimate put it at 3.5%. Even if the higher figure holds, a bigger COLA doesn’t necessarily mean retirees end up ahead financially, since the adjustment is meant to help benefits keep pace with inflation rather than increase purchasing power. It’s backward-looking, so retirees feel higher prices before their benefits catch up.

While many seniors and retirees depend on Social Security, adding passive income sources, like blue-chip dividend stocks, makes sense now, especially with interest rates drifting higher. We screened our 24/7 Wall St. blue chip dividend stock database for large-cap companies that pay a higher dividend than the projected Social Security increase. While many high-yield savings accounts pay rates similar to the projected increase, they offer no growth or total return potential. Our five blue chips offer both. All are rated Buy by the top Wall Street firms we cover.

Why Do We Recommend Blue Chip Dividend Stocks?

Blue chip stocks are shares of large, well-established companies considered less risky and more financially stable than other stocks. They are often industry leaders with strong brand names, reputations, and a history of consistent growth. They also tend to raise dividends regularly.

Altria

Altria (NYSE:MO | MO Price Prediction) is one of the world’s largest producers and marketers of cigarettes and other tobacco-related products. This tobacco stock offers value investors a solid entry point and a 6.10% dividend yield. Altria manufactures and sells smokable and oral tobacco products in the United States primarily to wholesalers, including distributors and large retail organizations, such as chain stores. The company’s payout ratio is around 100% of earnings, which sounds thin. Still, it’s backed by an unusually stable, cash-generative tobacco business with a very long history of dividend increases. The risk here is more about long-term volume decline than a near-term cut.

The company primarily sells cigarettes under the Marlboro brand, as well as:

• Cigars and pipe tobacco, principally under the Black & Mild and Middleton brands
• Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
• on! Oral nicotine pouches
• e-vapor products under the NJOY ACE brand

Altria used to own over 10% of Anheuser-Busch InBev (NYSE: BUD), the world’s largest brewer. In March 2024, the company sold 35 million of its 197 million shares through a global secondary offering. That represents 18% of its holdings but still leaves 8% of the outstanding shares in its back pocket. Altria also announced a $2.4 billion stock repurchase plan partially funded by the sale.

Altria increased its quarterly dividend in August by 4.7%, from $1.06 to $1.11 per share, marking its 58th consecutive dividend increase.

UBS has a Buy rating with a $79 target price.

Bristol Myers Squibb

Bristol-Myers Squibb (NYSE:BMY) is a global biopharmaceutical company committed to discovering, developing, and delivering transformative medicines for patients with serious diseases across oncology, hematology, immunology, cardiovascular disease, neuroscience, and other therapeutic areas. It remains a solid long-term pharmaceutical stock, offering an outstanding entry point with a reliable 3.69% dividend.

The company’s platforms comprise chemically synthesized or small-molecule drugs, including protein degraders, as well as biologics produced through biological processes. These platforms also encompass ADCs, CAR-T cell therapies, and radiopharmaceutical therapeutics. Small-molecule drugs are typically administered orally as tablets or capsules, although other drug-delivery mechanisms are also used. Biologics are usually administered by injection or intravenous infusion. CAR-T cell therapies are administered by intravenous infusion.

Its growth portfolio includes:

• Opdivo
• Opdivo Qvantig
• Orencia
• Yervoy
• Reblozyl
• Opdualag

Bristol Myers Squibb’s legacy portfolio includes:

• Eliquis
• Revlimid
• Pomalyst/Imnovid
• Sprycel
• Abraxane

Roth Capital has a Buy rating with a $75 target price.

Comcast

Comcast (NASDAQ:CMCSA) is an American multinational telecommunications and media conglomerate. With a dependable 4.95% yield, this is a solid idea now. This global media and technology conglomerate offers an 18-year dividend-growth streak, averaging ~7.5% annual payout growth over five years. Weakness reflects broader cord-cutting and streaming competition pressures, which it is addressing with a corporate spin-off. With a current yield well covered by earnings, a payout ratio of about 22% to 25%, this company is one of the lowest and best-covered of our blue-chip leaders.

Its Residential Connectivity & Platforms segment provides residential broadband and wireless connectivity services, residential and business video services, Sky-branded entertainment television networks, and advertising. The Business Services Connectivity segment offers connectivity services for small business locations, including broadband, wireline voice, and wireless services. It also offers solutions for medium-sized customers, larger enterprises, and small business connectivity services in the United Kingdom.

The Media segment operates NBCUniversal’s television and streaming business, including:

• National and regional cable networks
• The NBC and Telemundo broadcast networks
• Owned local broadcast television stations
• Peacock, a direct-to-consumer streaming service

It also operates international television networks comprising the Sky Sports networks and other digital properties. The Studios segment operates NBCUniversal and Sky film and television studio production and distribution operations.

The Theme Parks segment operates Universal theme parks in:

• Orlando, Florida
• Hollywood, California
• Osaka, Japan
• Beijing, China

Comcast announced earlier this year that it is spinning off most of its NBCUniversal cable television networks into a new, independent public company called “SpinCo.” This new entity will include popular cable channels like USA Network, CNBC, MSNBC, Bravo, E!, Syfy, and Oxygen, along with digital assets like Fandango and Rotten Tomatoes. By separating these mature cable channels, Comcast aims to isolate its declining linear television business from its higher-growth core assets, which will remain under Comcast. These retained core businesses include Xfinity broadband and wireless operations, the Peacock streaming service, NBC broadcast television, Universal Pictures, and Universal theme parks.

Rosenblatt Securities has a Buy rating with a $31 target price.

Franklin Templeton

Franklin Templeton (NYSE:BEN) is a global investment management company serving clients in over 150 countries. Paying a solid 3.90% dividend, the company has raised the dividend every year since 1981, a remarkable 46-year streak of consecutive dividend growth. Through its specialist investment managers, it provides global capabilities across equity, fixed income, alternatives, and multi-asset solutions.

The company provides investment management and related services to retail, institutional, and high-net-worth investors worldwide. Its investment products include:

• Sponsored funds
• Institutional and high-net-worth separate accounts
• Retail separately managed account programs
• Sub-advised products
• Other investment vehicles

Its funds include registered funds (including exchange-traded funds) and unregistered funds. It offers its services and products under its various distinct brand names, including:

• Alcentra
• Benefit Street Partners
• Brandywine Global Investment Management
• Canvas

TD Cowen has a Buy rating with a $40 target price.

Verizon

Verizon Communications (NYSE: VZ) is an American multinational telecommunications company that continues to offer tremendous value. It trades at 9.13 times its estimated 2026 earnings and pays a 5.52% dividend. Verizon provides a range of communications, technology, information, and entertainment products and services to consumers, businesses, and government entities worldwide.

Verizon’s trailing 12-month interest coverage ratio is 4.6× to 5×, providing ample cushion for dividend payments. With a very predictable revenue stream from telecom services, the company has less exposure to commodity cycles. In addition, its scale helps with financing and absorbing shocks. Public reports indicate that management has increased the dividend for 20 consecutive years and expects at least $21.5 billion in free cash flow this year.

It operates in two segments. The Consumer segment provides wireless services across the United States through Verizon and TracFone networks, as well as through wholesale and other arrangements. It also provides fixed wireless access (FWA) broadband through its wireless networks and related equipment and devices, such as:

• Smartphones
• Tablets
• Smartwatches
• Other wireless-enabled connected devices

The segment also offers wireline services in the Mid-Atlantic and northeastern United States through its fiber-optic network, Verizon Fios product portfolio, and copper-based network.

The Business segment provides wireless and wireline communications services and products, including:

• FWA broadband
• Data
• Video and conferencing
• Corporate networking
• Security and managed network
• Local and long-distance voice

Network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally.

Raymond James has an Outperform rating with a $56 target price.

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