Best stock to picks Reliable Blue Chips for the Debt Crisis

Best stock to picks Reliable Blue Chips for the Debt Crisis : The Treasury has warned of an Aug. 2 deadline to raise the debt ceiling. Democrats refuse to consider any debt-cutting proposal that does not include revenue increases, and Republicans refuse to consider any bill that does include them.

how can investors protect themselves amid this mayhem? After all, the “safe haven” of U.S. Treasuries won’t be considered very safe if Uncle Sam winds up defaulting on his debts. And you can bet if things go south in Washington, they’ll go south on Wall Street, too

Going to cash until things blow over is an option, but not always the best one for many investors. If you have an IRA, you likely will pay a hefty penalty to bail out now. Besides, market timing always is a tricky business — those folks who bailed out in early 2009 to “protect” their finances missed out on a screaming bear market where the stock market soared 60% in the subsequent 12 months. Even if you know when to get out, it’s hard to know when to get back in.

So, where can you turn right now? Low-risk, high-yield dividend stocks are as good a place as any. Blue chips with reliable revenue streams that throw off big quarterly payouts might not be bulletproof, but they could be some of your best shots at stability in this crazy market.

Here are five picks to consider: Verizon (NYSE:VZ), McDonald’s (NYSE:MCD), PepsiCo (NYSE:PEP), Colgate-Palmolive (NYSE:CL) and Lorillard (NYSE:LO).

Verizon (NYSE:VZ)
This telecom giant is about 7% shy of a new 52-week high but still delivering an impressive 5.4% yield at these valuations. And contrary to AT&T (NYSE:T), which has seen revenue mostly flat since 2008, Verizon has grown its revenue by almost 10% in the same period. And while Verizon got the iPhone this spring, many experts believe a large number of subscribers still are waiting for the release of the iPhone 5 from Apple (NASDAQ:AAPL) this fall on Verizon’s network.

Also, while rival AT&T saw a decent pop after its March offer to buy out T-Mobile, resistance to the proposed merger is growing. There is no reason to expect Verizon to be marginalized if things go through, and increasing opposition to the deal could squash AT&T’s move to leapfrog Verizon to become the top wireless carrier in the U.S.

McDonald’s (NYSE:MCD)
Despite its massive size, McDonald’s continues to cook up great results for shareholders — most recently, in quarterly results that show a 16% revenue increase. The stock has outperformed the market nicely, adding 24% in the last year and more than 13% year-to-date. That’s in part because more than half of McDonald’s revenue comes from outside the U.S., where the company still can see big growth.

That international exposure also is good news if default comes to roost. With its large cash flows, the company will have the resources to continue to innovate and experiment with new products like its recent frozen lemonade concoction that has helped juice summer sales. That reliable revenue stream also throws off a plump dividend of 2.8%.

PepsiCo (NYSE:PEP)
If you’re looking for another domestic consumer powerhouse with an emerging market footprint, PepsiCo is a good choice. In the latest quarter, beverage volume growth increased 13% in China, 17% in India and 15% in Turkey. And beyond these brisk drink sales abroad, there are plenty of foodstuffs that will keep revenues booming at home, even in tough times — including products like Quaker Oats and Lays potato chips.

Pepsi just took a tumble after its recent earnings report and disappointing outlook, but this sell-off might be a buying opportunity. PepsiCo raised its dividend for its 39th consecutive year in May, proving the bulletproof distributions from PEP stock. The company now yields 3.1% and has seen an annual growth rate of 12.6% in its dividend during the past five years — a sign of stable income if ever there was one.

Colgate-Palmolive (NYSE:CL)
Consumer products giant Colgate-Palmolive made waves this year with its purchase of the Sanex personal care brand in Europe from Unilever PLC (NYSE:UL) for about $950 million. That will give the already dominant company an opportunity to expand its footprint even more overseas. Colgate already has seen a 10% increase in revenue for its full fiscal year of 2010 compared with 2008 numbers, and the Sanex buyout will mean continued growth.

And you can’t get much more stable than a company selling soap and toothpaste — consumer products like that will sell no matter what mayhem tomorrow brings. On the dividend side, the 2.7% yield isn’t overly impressive but is rock solid. Colgate has paid dividends since 1985 and has seen 48 consecutive annual increases in its distributions.

Lorillard (NYSE:LO)
One of America’s smaller tobacco companies, the most successful Lorillard product is menthol cigarettes under the Newport brand. But while LO might not be on top of the heap in the tobacco market, its numbers are more impressive than some bigger rivals. Lorillard has seen revenue increase for each of the past four fiscal years, and its stock value has jumped almost 40% in the past 12 months to double the broader market’s returns.

While cigarette sales overall have been in a slow decline recently because of excise tax increases – not to mention the obvious health risks of smoking – Lorillard has managed to actually grow sales in its top Newport and Maverick brands. Revenue and earnings both rose about 11% in its most recent quarterly report. LO currently yields 4.8% but has seen two dividend increases since early 2010. (source www.investorplace.com )