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Due to continued market volatility, low interest rates and weekly declines in stock prices for six of the last seven weeks, many investors are seeking a more defensive posture. With recurring headline risk from Greece, the US national debt ceiling and the US economy, we see the wisdom in putting money to work in those select large cap stocks that provide both current income (with the possibility of continued dividend growth) and prospects for long-term price appreciation. Here are five blue chip companies that meet our criteria:

Abbot Laboratories (NYSE:ABT)

Abbot Labs is a multi-faceted health care company targeting pharmaceuticals, diagnostics, medical devices and nutrition. Founded in 1888, Abbot has a market cap of $81 billion and annual revenue of 35 billion. Abbot has excellent exposure to emerging markets through both their nutritional and pharmaceutical divisions and this is perhaps best illustrated by their acquisition of Piramal which made Abbot the largest pharma company in India.

With a stock price of $52 and a dividend of $1.92, Abbot provides a current yield of 3.7%. Most importantly, not only is this a sustainable dividend but last year was the 38th consecutive annual increase in the dividend.

The pharmaceutical division has a solid pipeline and no near-term patent expiration issues. The medical device division should benefit by Johnson & Johnson (NYSE:JNJ) deciding to vacate the drug eluding stent business. Abbot has a reputation for being shareholder friendly by returning cash to shareholders and unlocking value in the shares (think the 2004 Hospira spinout to shareholders). Currently, there is some talk on the street that Abbot should spinout the nutritional business (Simulac and Ensure among others) to shareholders in view of the success Bristol Meyers had when they spun-out Mead Johnson (NYSE:MJN).

Emerson Electric (NYSE:EMR)

Emerson is a diversified, global technology company supplying industrial, commercial and consumer markets around the globe. Founded in 1890 and based in St. Louis, Missouri, Emerson has a market cap of $40 billion and annual revenue of $21 billion. Emerson offers broad exposure to global markets with over half of its sales from outside the United States and 34% from emerging markets. Emerson grows both organically and via acquisitions, with some $4 billion in strategic acquisitions completed in the past two years.

With a stock price of $53.40 and a dividend of $1.38, Emerson provides a current yield of 2.6%. Emerson has the enviable record of having increased its dividend for 54 consecutive years. The company runs a tight ship and looks for underlying sales growth--this year in the 7- 10% range with profit growth exceeding that.

Johnson & Johnson (JNJ)

Johnson & Johnson, founded in 1886, is another multifaceted health care company. Total market cap is $180 billion and annual revenue is $61 billion. The OTC consumer division provides products such as Tylenol, Band-Aids, Listerine, Splenda and Neutrogena. Total consumer sales last year were over $14 billion. The Pharmaceutical segment has revenue of over $22 billion led by their flagship product Remicade, The medical device and diagnostic segment has revenue in excess of $24 billion making it the world’s largest medical techonology business. Among their brands in this segment are Ethicon, DePuy and Cordis.

As a company, new products introduced in the past five years accounted for approximately 25% of 2010 sales. Johnson & Johnson is nothing if not consistent as they have had 27 consecutive years of adjusted earnings increases and have raised the dividend for 49 consecutive years. The most recent dividend increase, this past April, was 5.6%. Recently J&J’s earnings growth has been impaired by their well publicized manufacturing problems which finally look to be resolved.

With a stock price of $65 and a dividend of $2.98, Johnson & Johnson provide a current yield of 3.5%. J&J is in the midst of buying Synthes, a leader in the orthopedic device market, for $21.3 billion which would be J&J’s largest acquisition ever.

Clorox (NYSE:CLX)

Clorox is a consumer products company operating in four segments: cleaning, lifestyle, household and international. The cleaning segment includes brands such as Clorox, Pine-Sol, Liquid-Plumber and Tilex. The lifestyle segment includes brands such as Hidden Valley, Brita, Burt’s Bees and K.C. Masterpiece. The household segment includes brands such as Glad and Kingsford.

Founded in 1913, Clorox has a market cap of $9 billion and annual revenue of 5.5 billion. Earnings per share increased 12% to $4.24 last year. With a stock price of $66.56 and a dividend of $2.40, Clorox provides a current yield of 3.6%. The dividend was increased 10% last year and total annual dividends have increased each year for the past 33 years. Additionally the company repurchased 2.4 million shares of common stock last year. A possible additional kicker is that Clorox has been a rumored takeover candidate off and on for the past couple of years.

Procter & Gamble Co. (NYSE:PG)

Proctor & Gamble is the consummate consumer products company. P&G operates in three global business units; Beauty and Grooming with products such as Head & Shoulders, Cover Girl, Olay, Pantene, Braun, Gillette, Tampax, and Ivory. The Health and Well Being unit offers products such as Always, Crest, Oral-B, Pringles and Iams pet food. The Household Care unit offers products such as Dawn, Downy, Tide, Bounty, Charmin, Swiffer, Puffs, Pampers and Duracell.

Founded in 1837 and based in Cincinnatti, Ohio, Proctor & Gamble has a market cap of $175 billion and annual revenues of $78.9 billion. Last year core earnings per share increased 6% and organic sales grew 3%. In April P&G increased their quarterly dividend by 9.5%, making this the 120th consecutive year that P&G has paid a dividend and the 54th consecutive year that the dividend has been increased. Over the past 54 years, the dividend has increased at an annual compound average rate of approximately 9.5%. P&G’s premium brands were impeded by the ‘Great Recession.' However, the P&G marketing machine appears to be turning the Tide (pun intended!) as last year they managed to increase market share in brands and countries accounting for approximately 66% of sales and their market share increased in 14 of the top 17 countries in which they operate. Last year P&G returned $6 billion to shareholders through the repurchase of common stock. With a stock price of $62.76 and a dividend of $2.10, P&G provides a current yield of 3.4%.

The five companies discussed above provide investors with impressive current yields through dividends that are both sustainable and growing while at the same time providing the opportunity for significant capital appreciation. During uncertain periods in the market, stocks such as these provide investors with a constant cash flow, effectively paying them to ride out the rough patches in anticipation of capital gains.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 5 Blue Chip, Must Own Stocks for Dividends and Growth