One Of These Two 7% Yielding Blue Chips Is A Screaming Buy

Posted On November 5, 2020 4:16 am
By: Dividend Sensei

High-yield blue-chips can be just the ticket to a prosperous retirement, as well as mouth-watering long-term returns. One of these companies is a beloved 7% yielding dividend aristocrat that’s been delivering incredibly dependable and generous income for 33 consecutive years. However, it’s commodity-based business model and elevated FCF payout ratio, during an out of control third wave of the pandemic makes it speculative and riskier.

In contrast, the company I’ve been buying aggressively in recent days offers the safe 7% yield, but with a much safer and well-covered dividend. Analysts expect it to grow about twice as fast as its rival, and potentially deliver 22.5% CAGR total returns over the next five years, more than 5X the S&P 500.

I just bought this very safe, fast-growing 7% yielding blue-chip twice, during its knee-jerk post-election 7% crash. I’ve even set limits to keep buying as long as this anti-bubble/Buffett style “Fat Pitch” blue-chip keeps falling despite exceptionally strong fundamentals.

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About author

Dividend Sensei

I'm an Army veteran and former energy dividend writer for The Motley Fool. I'm a proud co-founder of Wide Moat Research, Dividend Kings, and the Intelligent Dividend Investor. My work can be found on Seeking Alpha, Dividend Kings, iREIT, and the Intelligent Dividend Investor. 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.