2 Amazing Blue-Chip Bargains For A Rich Retirement

2 Amazing Blue-Chip Bargains For A Rich Retirement

Posted On April 7, 2021 5:05 am

The stock market has nearly doubled since March 2020 lows. Many of the highest quality blue chips are now becoming dangerously overvalued.

As long as you pay fair value or better for the world’s best companies, you have the luxury of ignoring, or not, valuation bubbles.

Caterpillar is an example of a very richly-priced blue-chip, with zero upside potential through 2023, basically matching that of the S&P 500.

Finding a SWAN quality hyper-growth dividend aristocrat trading at good valuations isn’t always possible. But by combining 2 blue chips, you can create a synthetic company whose fundamentals can meet almost any need or goal.

Combining two blue-chips, in particular, creates a company with a 3.4% very safe yield, 21.5% consensus growth, and that’s 22.5% undervalued. Analysts expect it to deliver almost 25% CAGR long-term total returns, about 3X that of the S&P 500.

Given the growth profiles of both companies, as well as the fact that they’ve historically delivered 31% CAGR total returns, 4X more than the S&P 500, this powerhouse combo of quality, yield, growth, and value could be just what you need to achieve a rich retirement.

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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'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.

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