The month of October often provides some of the best opportunities to acquire stocks, including those that pay high dividends.

Historically, October has been one of the more volatile times of the year, and it is the volatility that creates attractive prices.

Each of these blue-chip dividend stocks pays extremely safe dividends, yields more than 2% and doesn't appear to be extremely overvalued like many other dividend-paying stocks.

Several of these dividend growth stocks are members of the Dividend Aristocrats list, and all of them score high using our proprietary dividend safety scores.

1. Aflac (AFL - Get Report)

Rumor has it that the company became known as Aflac because no one could find a duck that could say American Family Life Assurance Co. of Columbus.

Possibly, but the reality is that Aflac is a holding company whose two segments, Aflac Japan and Aflac U.S., sell supplemental health and life insurance. Its customers are reached through independent brokers, sales associates and individual agencies.

Aflac Japan is the largest source of business, accounting for about 90% of policy liabilities and 80% of total operating revenue of $14.5 billion.

Aflac offers to protect individuals and their families against catastrophic loss due to accident, serious injury or illness including the cost of critical care not normally covered by other insurance.

The company may not have the biggest market share, but it has carved out a huge lead in consumer awareness through the ever-popular Aflac advertising. Individuals are the prime customers, and the duck has been a marketing force majeure in the U.S.

The U.S. insurance industry is highly regulated by various agencies mostly at the state level. In addition to U.S. regulators, Aflac must comply with regulators in Japan.

Both the disability and life insurance industries are very price-competitive, led by U.S. giants such as Cigna, Hartford Life and Unum.

Aflac's considerable success in Japan is the driving force for overall growth. It also presents an exceptional concentration and exposure to fluctuations of the yen.

The $1.64-a-share dividend offers a yield of 2.3%. The payout ratio of just 27% of earnings per share and a mere 11% of free cash flow may appear unusually low, but there could be a reason. Because more than 80% of business is in Japan, that is most likely where the company's nearly $4 billion in cash is held.

It is possible a high portion of U.S. earnings is paid out.

Aflac is a very safe bet when dividends are concerned, with a 20-year compound annual dividend growth rate of 16.1%. In recent years the trend has slowed to a more sober 5.6% pace.

The Aflac duck isn't enough to offset average yield and slowing growth. There are probably better alternatives.

2. Cardinal Health (CAH - Get Report)

With more than $120 billion in sales, Cardinal Health is the nation's third-largest distributor of drugs and related health care products. The company serves a key function in the complex U.S. health care system.

There are two customer channels.

The pharmaceutical segment distributes branded and generic pharmaceuticals, over-the-counter health care, specialty pharmaceutical, and consumer products to retailers, hospitals and other health care providers.

The company's medical segment distributes a range of laboratory, medical and surgical products and services to hospitals and related facilities.

The health care distribution industry is regulated and monitored by federal and state agencies such as the Food and Drug Administration.

The business is highly price competitive, and operating margins are thin. The emphasis is on efficient working capital management.

To adjust to continuing price competition, Cardinal Health and others seek long-term supply contracts with health care facilities that include a formula for price increases.

Health care costs have trended higher then the general pace of inflation, increasing two to four times faster than the Producer Price Index.

Wide ranges of value-added data services are provided to manufacturers and customers from inventory management, data reporting, new product launch support and many more. This strength in technology allows Cardinal Health to adapt to any change in customer delivery patterns.

Cardinal Health's $1.80-a-share annual payout offers a 2.4% yield. The payout ratio of 37% of earnings per share is hovering around the trend line but offers room for expansion.

The company has paid a quarterly dividend for more than 20 years, compounding at 19.9% over this period. During its 10-year dividend growth streak, the dividend growth was 23.6% annually.

Even using the more modest 12.8% dividend growth last year, the payout would grow to $3.60 in just 5.6 years.

3. Honeywell (HON - Get Report)

This diversified manufacturing and technology honcho seems like it has been around forever.

Honeywell is organized into three businesses: aerospace (40% of sales); automation and control solutions (37%); and performance materials and technologies (23%).

It all adds up to about $39 billion in revenue.

Government aerospace contract revenue is about $3.7 billion. Export sales are 14% of total revenue, while international chips in another 39%, most of it from Asia and Europe.

Aerospace and industrial manufacturing are capital intensive, often encountering complex government clearance and approvals before doing business. The barriers to entry are steep.

With so many products, there is no lack of competitors for Honeywell, but the industry is a classic oligopoly.

The company's well-run reputation has been earned though high marks for on-time delivery. This often gives Honeywell an edge.

Order backlog has been steady at about $18 billion for the past several years. Military spending budgets and adverse currency translation forces are contributors.

Slow global growth has done little to encourage capital spending, and that has hurt as well.

Honeywell can be sensitive to short-term economic cycles.

During the financial crisis, revenue declined 18%, and earnings per share fell 66%. However, the company recorded positive cash flow and continued paying dividends.

But Honeywell's financial strength shouldn't be overlooked. The company has produced positive cash flow in each of the [ast dozen years, and is one reason why Honeywell's dividend is so safe.

The $2.38-a-share annual payout offers a 2.1% yield. The payout ratio has been trending slightly lower and at 36% of earnings per share is about as low as anytime since 2007.

With operating margins trending higher, this suggests that the company has a considerable cushion and could increase the payout faster.

Honeywell has been paying quarterly dividends for almost 50 years. Over the past 20 years, dividends have grown 8.9% annually and 12.2% per year over the past five.

The combination of a relatively low payout ratio and improving cash flow suggests that Honeywell is more than a safe bet and investors could see even better dividend growth.

4. PPL (PPL - Get Report)

The former Pennsylvania Power and Light was founded nearly a century ago. This utility generates and delivers electricity and natural gas.

Customers extend beyond the Keystone state to include Kentucky, Tennessee and Virginia. Using its technical know-how, PPL operated four electric-distribution networks in the U.K.

The American utility business is known for generating very predictable results because of the essential nature of utility services. For this reason, utilities are a favorite sector for investors living off dividends.

PPL has paid cash dividends on its stock in every quarter since the mid-1940s. In February, the company increased its dividend for the 14th time in 15 years.

On a percentage basis, the dividend has increased by 187% during that period. Over the past 10 years, dividend growth has averaged 5.2% annually and 1.4% annually over the past five.

Management has said that the 67% payout ratio will be maintained through next year.

Shares of PPL offer investors a high yield of 4.5%.

5. Target (TGT - Get Report)

Target is the nation's second-largest retailer behind Walmart. Its familiar red and white bulls-eye is on 1,792 stores located across the U.S.

Target generates $73 billion in annual revenue. 

The company is a mature retailer with annual revenue growth of less than 2%.

Strong operating and financial management have produced five-year growth of 5.8% in earnings per share and nearly 10% in free cash flow. This is a very good sign that Target is smoothly adjusting to its mature status.

Online shopping is rapidly changing the face of traditional retailing. Target has adapted with Target.com.

Online retailing requires lots of investment in logistics, but this costs less than building new stores. This could spell good news for Target's cash flow and dividend-paying capabilities.

Target is a safe choice for dividend investors. The $2.40-a-share dividend offers investors a yield of 3.5%.

The company has paid uninterrupted dividends since its founding in 1967 and has raised its dividend for consecutive 45 years. In five years, the company will join the list of Dividend Kings.

Target's dividend has compounded 14.3% annually over the past 20 years as well. Over the past five years, Target has raised the payout by nearly 20% annually.

The annual payout of $2.40 represents 42% of earnings per share and 45% of free cash flow. Return on invested capital is 13%; long-term debt is 48% of capital, and return on equity is well above average at 26%.

Target's common stock is quite stable with a beta of 0.52. This means that for every 1% change in the overall market Target will move about half as much.

In other words, Target's key financial metrics look healthy and support future dividend growth.

6. T. Rowe Price (TROW - Get Report)

From its founding days in 1937 during the depths of the depression, Baltimore-based T. Rowe Price has lived through a few stock market cycles.

T. Rowe Price is one of the enduring and respected names in money management and investment services for individuals and institutional investors. The firm invests in public equity and fixed income everywhere in the world.

To institutional investors such as pension and retirement funds, T. Rowe Price is a top ranked manager year after year.

Individual investors can choose from a broad selection of mutual funds the company sells through offices located throughout the world.

Both segments of its business are dependent on factors beyond the company's direct control. The world economy and direction of stock and bond markets are but two factors.

The greatest assets in this business are employees, but in this area, long-term contracts are practically nonexistent.

T. Rowe Price competes with thousands of other managers and mutual fund sponsors on the basis of performance and the level of fees.

The company built its reputation by hiring the best analysts and managers performing traditional, bottom-up fundamental analysis. Demonstrating their adaptability to the present, investment efforts have expanded to include quantitative measures as well.

T. Rowe Price operates in an industry that has lots of unpredictable factors. The company stand out because of its safety, dividend growth and yield. This is a rare combination.

The current $2.16-per-share dividend payout offers an above-average 3.2% yield. The payout ratio (based on EPS) has been volatile over time, ranging from 38% to 87% of EPS. The current ratio of 51% is right in the middle.

T. Rowe Price has grown its dividend by 17% a year over the last 20 years. This has been a pretty consistent pace year after year, and healthy dividend growth should continue.

7. Union Pacific (UNP - Get Report)

Back in 2010, Warren Buffett's Berkshire Hathaway shelled out $26.5 billion to acquire all of Burlington Northern Santa Fe. (See all of Warren Buffett's dividend stocks here.) Every bit of evidence says that the deal has been a big success.

Union Pacific is the only other big railroad line in the West next to Burlington Northern Santa Fe. So if you like Buffett's selection, you might want to look at Union Pacific.

The company owns more than 32,000 miles of track. This rail network connects customers on the Pacific and Gulf Coasts with the Midwest and East Coast.

Railroads often offer the lowest-cost way of transporting goods across the country. Nobody starts a new railroad anymore, because the barriers to entry are too high.

Virtually any and every commodity, from agriculture and chemicals to finished goods such as autos and parts, can be transported to market through Union Pacific.

Considering the annual volume of Asian-sourced goods imported through West Coast ports to be distributed throughout the U.S., Union Pacific is well-situated.

Union Pacific also benefits handsomely from the production of shale oil.

Union Pacific is surprisingly profitable with excellent cash flow. Its operating margin was 37% last year. This provides plenty of cushion for any surprises.

The current annual dividend payout of $2.20 equates to a 2.3% yield. The payout ratio (based on EPS) has been trending upward over the past decade to the current level of 43%. This means dividends have compounded at a 22% annual pace over the past decade and 27% per year over the past five.

The company has a good chance of maintaining an above-average dividend. Consensus estimates point to GWW Chart GWW data by YCharts 9.2% annual earnings growth in the next five year. This, along with a gradually rising payout ratio could make maintaining the dividend reasonable.

 

8. United Technologies (UTX - Get Report)

United Technologies is an important heavy manufacturing corporation. It's perhaps best known for Pratt & Whitney engines that are used on many Boeing aircraft, Otis elevators and Carrier air conditioners. This is only part of the story, however.

Overall, United Technologies offers a broad range of products and services, about half of which go to the construction industry and the rest to aerospace. It all adds to more than $56 billion in annual revenue.

United Technologies is truly a global operation, and only about 35% of revenue comes from the U.S. Thirty percent comes from Europe, 21% from Asia and 14% from elsewhere. United Technologies is the biggest elevator company in China.

The two business sectors United Technologies operates are both dependent on long sales cycles in competition with various other giants. Contracts for projects typically last multiple years. Payments can be based on things such as reaching milestones or percent of completion.

In the pursuit of aerospace opportunities, there are Lockheed, Honeywell, Northrop GrummanGeneral Electric, Rolls Royce and others. In the elevator business, Otis is strongly entrenched as the world's largest elevator company. Westinghouse and Schindler continue to nip at the company's heels, however.

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Revenue is sensitive to economic factors such as global capital spending as well as budget appropriations for military spending.

United Technologies' annual revenue was down more than 12% in 2010 from 2008, reflecting the impact of the financial crisis. But free cash flow per share increased 5.6% over that period. This underscores a unique quality to many of the company's contracts. Revenue recognition sometimes differs from contract cash payments.

United Technologies' sales growth has averaged a mere 1.4% per year over the past five years. Military budget reductions and a pronounced construction slowdown in China have contributed to the malaise.

Even so, the company's most important financial ratios have held up. Operating margins have remained at more than 13%.

United Technologies is a bastion of financial safety and dividend growth. The current $2.64-per-share annual payout offers a 2.6% yield. What stands out is the current 31% payout ratio of EPS. Over the past 20 years, dividend growth has averaged 12% per year.

United Technologies holds almost $7 billion in cash, more than three times the current dividend. This helps explain the strong safety of the dividend.

9. US Bancorp (USB - Get Report)

Headquartered in Minneapolis, US Bancorp is a super-regional bank operating over 3,000 branches mostly in the Midwest and Western regions of the U.S. It is connected through almost 5,000 ATMs and through online and mobile devices.

USB offers a full menu of personal and business banking services. More than half of income comes from net interest. Fees for everything from bank service charges to investment management represent the balance.

The financial services industry is one of the most highly regulated industries in America. Increases in regulations stemming from the 2008 financial crisis have added administrative costs and restrained lending activity.

The Federal Reserve's pursuit of low interest rates makes traditional banking interest margins come under pressure.

From it's 1863 founding as a lender to agriculture, US Bancorp's revenue has grown as it evolved into a full-service bank and investment manager.

US Bancorp's strategy is to expand business regionally to locations that are less intensively competitive than money centers such as New York. This includes acquiring other regional or local banks.

The U.S. banking industry has been consolidating for decades, and US Bancorp is one of the strongest super-regional banks left. The company offers an attractive franchise either as a buyer or seller of assets.

The current $1.12-per-share annual payout offers investors a 2.6% yield. The yield is hardly eye-popping, but what you give up here is made up elsewhere. During the financial crisis, US Bancorp's revenues declined, and the company cut the dividend to comply with new liquidity and capital standards.

Since then, however, the dividend payout has been gradually restored. The current payout ratio of 23% of free cash flow is less than the 50%-60% level common before the financial crisis. Banks are better capitalized than ever before and pay much safer dividends.

10. W.W. Grainger (GWW - Get Report)

W.W. Grainger, founded in 1927, is an old-line industrial distributor whose business has been saved and transformed by technology.

W.W. Grainger is involved in heavy materials-handling equipment, electrical products, power and hand tools, pumps and plumbing equipment, and lots more.

Customers include companies of all sizes as well as government agencies and other institutions. Products are sold direct, through W.W. Grainger branches, catalogs and online through the company's website.

Anyone with a telephone and a garage can get into the industrial distribution business. Success and staying power, however, require lots of inventory and the ability to achieve the critical logistics of consistent timely delivery.

The trick in every distribution business is having just the right inventory and collecting cash from customer orders before paying suppliers.

W.W. Granger is a master of these skills. The company so good, in fact, that it offers customers inventory management solutions.

Distributor operating margins are thin, but W.W. Grainger's operating margin of around 13% is unusually favorable. 

The current $4.88-per-share annual dividend payout equates to a 2.2% yield. W.W. Grainger boasts 12% annual dividend growth over the last 20 years as well. The company's dividend safety is almost perfect. The payout ratio has been trending upward in recent years but is still at a moderate 43% of EPS. This gives it lots of cushion.

W.W. Graniger is not in a flashy business, but that doesn't matter. Investors seeking a rare combination of dividend safety and growth can consider this stock a qualified candidate.

This article is commentary by an independent contributor. At the time of publication, the author held positions in PPL and TROW.