Blue chip dividend stocks are usually considered stable long-term investments, but they lost their luster over the past few years as interest rates spiked. Rising rates made risk-free CDs and Treasury bills more appealing, while making it tougher for many companies to support their dividends with consistent profits.

But as interest rates decline again, it might be smart to buy some of those blue chip dividend plays. So even if you only have $2,000 available to invest, you should consider buying and holding these two classic income stocks: American Express (AXP 0.32%) and Realty Income (O 0.82%).

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1. American Express

American Express is often considered a credit card company, but it's also one of the U.S.'s largest banks. Unlike Visa and Mastercard, which only issue co-branded cards instead of issuing any cards of their own, American Express is both a card issuer and its own bank.

Its total number of active cards rose 4% to 123.3 million in 2024. Therefore, it generates its revenue from both card processing fees and interest payments on its outstanding loans.

American Express controls a smaller slice of the global card-payments market than Visa and Mastercard, but that's an intentional business decision. Since it needs to back its own cards with its own balance sheet, it only issues them to lower-risk, higher-income individuals.

The company is also better insulated from interest rate swings than Visa and Mastercard. Rising rates might curb consumer spending and credit card purchases, but they'll still boost its banking segment's net interest income.

That balanced business model enabled American Express to grow its revenue and earnings per share (EPS) at compound annual growth rates (CAGRs) of 10% and 12%, respectively, from 2019 to 2024. From 2024 to 2027, analysts expect its revenue and EPS to have CAGRs of 8% and 13%, respectively. Those are rock-solid increases for a stock trading at 18 times forward earnings.

The stock's forward dividend yield of 1.2% might seem low, but the company has raised its payout annually for 13 consecutive years. Its low payout ratio of 20% also gives it plenty of room for future dividend hikes.

So if you're looking for an evergreen financial stock that offers an attractive mix of growth and income, American Express checks all the right boxes.

2. Realty Income

Realty Income is one of the largest real estate investment trusts (REITs) in the world. REITs buy a lot of properties, rent them out, and split that rental income with their investors. They must also pay out at least 90% of their taxable income as dividends to maintain a lower tax rate.

Realty Income owns a portfolio of 15,621 properties, which it leases to 1,565 different clients across more than 89 industries. It mainly focuses on recession-resistant retailers like drugstores, convenience stores, and discount retailers.

Last year, its top tenants included Walgreens, 7-Eleven, Dollar General, and Dollar Tree, but no single tenant accounted for more than 3.5% of its annualized rent. And declining interest rates should make it cheaper for the REIT to purchase new properties.

Some of its tenants have struggled with store closures in recent years, but the company's year-end occupancy rate still rose from 98.6% in 2023 to 98.7% in 2024. That figure has also never dropped below 96% since its initial public offering (IPO) in 1994. It can maintain that high occupancy rate because its stronger tenants are still expanding as its weaker ones contract.

Realty Income pays its dividends every month instead of every quarter and has raised its payout 130 times since its IPO. It pays a forward annual dividend of $3.22 per share, which equals a yield of 5.7%.

It expects its adjusted funds from operations (AFFO) to rise from a range of 0.7% to 2.1%, to a range of $4.22 to $4.28 per share this year, and easily cover those dividend payments. It also looks like a bargain at 13 times the midpoint of its estimated AFFO this year. That high yield, low valuation, and evergreen business model all make Realty Income an easy stock to recommend in this turbulent market.