9 Legendary Dividend Blue Chips That Can Make You Rich

9 Legendary Dividend Blue Chips That Can Make You Rich

Posted On January 16, 2020 5:21 am

Here are 9 legendary dividend blue chips that can deliver safe and steadily growing dividends in all economic conditions, as well as double-digit total returns, and the prices to buy them in 2020.

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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 Seeking Alpha, Dividend Kings, iREIT, and Wide Moat Research. 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 24 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 and achieving long-term financial goals.

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  1. Tony January 18, 2020 at 8:33 am

    Love your stuff. One thing though. CAT is not an aristocrat. It did not raise for about 2 years recently.

    • Dividend Sensei January 21, 2020 at 4:38 am

      Actually dividend aristocrat status is based on annual dividends. A company can maintain status if it pays the same dividend 7 quarters in a row and hikes on the 8th quarter.

      CAT’s streak is 26 years and it’s an aristocrat.

  2. tony January 24, 2020 at 10:22 am

    My bad. I remember it being every 4 quarters at one point. Probably before all this technology and we actually had to order quarterly reports. haha. I bought CAT in 2016 and sold out in 2018.

    I target a buy point that has the dividend in year 10 being at least 8% of original purchase price. I use historical dividend growth numbers in most cases, but I will adjust it when one of our analysts says it should be higher or lower or my analysis sees it slowing because of FCF.

    I analyze the company before I buy using revenue, earnings, and free cash flow growth along with a review of their balance sheet and interest expenses. I then come up with different buy points based on my targeted long term desired return. For example, TGT was bought at a FCF yield between 14 and 16%. If I remember CAT was bought between an 11 and 13% FCF yield and sold when it hit around a 4-5% FCF yield.

    I take 10-12 years of data to average it over cycles. My model automatically calculates returns at different buy points. It gives me a range of outcomes that I can look at. It helps since we do not know future interest rates.

    I used to try and use a balance sheet analysis and buy at a discount. You get burned once in energy and shipping and you are done with it. haha. Very rarely, I will buy a non dividend payer.

    If you want some good ideas, look at Carole Lippman’s portfolio. She has run dividend growth for over 30 years. One of the big brokerages has since the 1990’s also. if you email me I can tell you which one.

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