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2 Dividend Blue-Chips Set To Soar And 1 You Should Ignore

2 Dividend Blue-Chips Set To Soar And 1 You Should Ignore

Posted On February 13, 2019 8:25 am
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One of these dividend blue-chips is likely to generate just 3% to 4% long-term returns while the other two will probably deliver double-digit results and beat the market.

Summary

  • Most investors are only looking to own 20 to 50 stocks in their portfolios, meaning you have to be selective with what you buy.
  • Gilead Sciences is a pharma blue-chip with a relatively weak growth outlook that even from today’s attractive valuation is likely to deliver merely bond like future returns.
  • In contrast, Pfizer and Johnson & Johnson are blue-chip SWANs with strong long-term cash flow and dividend runways and make far better buys today.
  • From today’s prices, JNJ is fairly value and likely to deliver about 10% long-term total returns. Pfizer is about 9% undervalued and likely to earn 12% returns over the next five years.
  • That being said, Pfizer and Johnson & Johnson still have their own risks that investors need to be comfortable with before buying them.

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About author

Dividend Sensei
Dividend Sensei

I'm an Army veteran and former energy dividend writer for The Motley Fool. I currently write for both Seeking Alpha, Simply Safe Dividends, and DividendSensei.com My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams, and enrich their lives. With 22 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and income streams. I'm currently on an epic quest to build a broadly diversified, high-quality, high-yield dividend growth portfolio that: 1. Pays a 5% yield 2. Offers 7% annual dividend growth 3. Pays dividends AT LEAST on a weekly, but preferably, daily basis

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