By: Dividend Sensei
The market is 30% overvalued, interest rates are near zero, and inflation is sky-high. It’s a perfect storm of negative headwinds for those hoping for a comfortable or even rich retirement.
Fortunately, high yield/fast growth dividend investing offers a low-risk way for you to beat inflation, retire rich, and stay rich in retirement.
PayPal and Square are two world-class hyper-growth blue chips that when combined with high-yield aristocrats like this 6.4% yielding blue-chip, can generate life-changing income and returns.
The aristocrat is attractively valued today, PayPal is close to fair value, and Square is wildly overpriced. But the combination of these three at fair value or better creates a 3.2% yield, 21.5% growth, and 24.7% consensus long-term total return potential.
Even adjusting for inflation and the risk of companies not growing as expected, SQ, PYPL, and this 6.4% yielding aristocrat generate inflation and risk-adjusted expected returns of 15.0% compared to 5.9% for the Nasdaq, 5.6% for the Dividend Aristocrats, 4.7% for the S&P, and 2.7% for a 60/40 portfolio.
In other words, it’s potentially the perfect combination to fight inflation today, retire rich tomorrow, and grow steadily richer over time, no matter what the stock market, economy, or inflation are doing.