Savings accounts, CDs and other investments considered safe no longer offer attractive interest or dividends. This has forced conservative investors to raise their risk tolerances and look to the stock market for returns that beat the rate of inflation and offer steady income. Picking individual stocks to capture capital return is a dangerous strategy, especially for those without the knowledge or experience to manage risk.

A better strategy is to invest in blue-chip stocks that pay healthy dividends. Large companies with long histories of growth and profitability, and proven abilities to weather good markets and bad, are blue-chip stocks. For investors looking to the equity market to earn a steady income, investing in blue-chip companies that pay healthy dividends is likely a better strategy than attempting to pick growth stocks that will outpace the market.

The following stocks are blue-chip companies with market caps above $10 billion and trade an average of at least one million shares daily. Add these names to your research list, but don't purchase based on the dividend alone.

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AstraZeneca PLC (6%)
United Kingdom-based AstraZeneca (NYSE:AZN) is a pharmaceutical company developing and manufacturing drugs in six main areas: cancer, gastrointestinal, cardiovascular, infection, respiratory and inflammation, and neuroscience. With an attractive P/E of 7.6 times and volatility that is almost half of the S&P 500, this may be an attractive company for the long-term investor.

SEE: Evaluating Pharmaceutical Companies

Lorillard, Inc (5.2%)
Lorillard (NYSE:LO) is the third-largest cigarette manufacturer in the United States. Founded in 1760, it's also the oldest operating tobacco company. Its flagship brand, Newport, is the second-largest selling brand in the United States and the top-selling menthol. With 2011 revenue of around $6.5 billion, Lorillard could be a core holding. Lorillard has been in a downtrend since its peak in mid July, but it's still up considerably in 2012. This is another company with low volatility and the recent downtrend has forced the dividend yield higher - a win for long-term investors just now purchasing shares.

SEE: Dividend Yield For The Downturn

Lockheed Martin Corporation (4.9%)
Aerospace giant Lockheed Martin (NYSE:LMT) not only develops and manufactures aircraft, it's also active in missile defense systems, naval contracts, and radar and communications systems. LMT had annual sales of $46.5 billion and a backlog of $80.7 billion of unfulfilled orders in 2011. The stock is currently in a strong uptrend and near its 52 week high - great news for a growth investor but for the income investor, waiting for a pullback to lock in a higher dividend yield may be the best strategy.

Verizon Communications, Inc. (4.6%)
If you're one of Verizon's (NYSE:VZ) 96 million customers, you know the company well. The residential and commercial communications services provider had 2011 revenues topping $70 billion. VZ has seen a pullback from its 52-week high, representing a strong entry point for investors who believe in the long-term viability of wireless technology. Along with Verizon, rival AT&T (NYSE:T) offers a healthy dividend and a similar fundamental story.

BP PLC (4.4%)
BP (NYSE:BP) is one of the world's largest oil and gas companies engaging in the refining, sale and exploration of gas and oil. BP has largely recovered from the 2010 Deepwater Horizon blowout that caused widespread damage along the Gulf Coast. In June, the stock began an uptrend that is still intact. Well off its 52-week high, BP represents a compelling buying opportunity.

SEE: Oil And Gas Industry Primer

The Bottom Line
Picking individual stocks comes with significant risk, regardless of the strategy. A considerable amount of analysis is necessary before committing funds to a stock. The dividend yield should be one of the many metrics used before committing investment funds. If you're uncomfortable or inexperienced with picking stocks, consider seeking help from a trusted financial adviser.

At the time of writing, Tim Parker owned shares of Verizon since 2010.

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