This 8.6% Yielding Blue-Chip Is A Rich Retirement Dream Stock

Posted On February 9, 2021 3:58 am
By: Dividend Sensei

The S&P 500 is 37% historically overvalued and likely to deliver 2% to 5% annual returns over the next five years.

But numerous anti-bubble blue-chips are still available, including this 8.6% yielding blue-chip.

It’s an industry legend and one of the safest high-yields on Wall Street as well as an anti-bubble stock.

That means it’s priced for negative growth, while analysts, management, rating agencies, and bond investors all expect model growth in the future.

If it grows at 0% forever, investors will make 8.6% annual returns vs. 7.9% CAGR long-term consensus for the S&P 500.

If you can avoid being a forced seller for emotional or financial reasons, then as long as it grows 0% or faster, it’s literally impossible to lose money in this stock over the long-term.

In reality, analysts expect about 11% annual long-term returns from this company, outperforming the market by 3% annually and the dividend aristocrats by 1% annually over the next 30 years. The bond market and rating agencies expect its cash flows to remain stable for at least the next 60 years.

This blue-chip currently offers 5.7X the market’s yield, 5X the 5-year income return potential, and 4.8X the 5-year risk-adjusted expected return.

This is why I’ve bought it 39 times since April 2020 for my personal Phoenix retirement portfolio.

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Photo: “Retirement Account” by GotCredit is licensed under CC BY

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.