One can always try to make a case for or against Treasury bonds being in a bubble. Irrespective of that, I personally don't consider investing in 10-year bonds (with a yield of 1.65%) or 30-year bonds (with a yield of 2.75%) as great long-term investments. Further, in the current economic and financial scenario, Sovereign bonds might carry the same risk as quality corporate (even higher risk in some Sovereign bonds).
Therefore, for the long term, I consider investing in some high-dividend-yield stocks than investing in U.S. Treasury bonds. In my opinion, the returns (over long term) would be much superior (with the same risk) in corporate equities or bonds than Sovereign bonds.
This article presents the high dividend yield companies, ideal for long-term investment. Further, the article also discusses one corporate bond ETF for investors looking for exposure to quality equity as well as quality corporate bonds.
Johnson & Johnson (NYSE: JNJ) - I like the highly diversified healthcare company with a product as well as regional diversification. Further, the sector catered to by JNJ is not very prone to economic shocks. JNJ has been a good dividend payer in the past with a dividend yield of 3.6%. In my opinion, the stock is excellent for a long-term portfolio. It also commands a higher rating than the U.S. Sovereign Rating.
Exxon Mobil (NYSE: XOM) - XOM is involved in exploration and production of crude oil and natural gas. XOM also engages in manufacture of petroleum products, as well as transportation and sale of crude oil, natural gas, and petroleum products. There are two important factors for considering XOM to be a part of a long-term portfolio. First, the company's operations are diversified in terms of regions and that reduces business risk. Second, I am very bullish on the oil and gas sector for the long term considering the impending growth in the most populated regions in the world. With a dividend yield of 2.7%, XOM presents an excellent long-term investment option.
Microsoft Corporation (MSFT) - is also a safe long-term investment in my opinion. MSFT also has a high dividend yield of 2.6% and a relatively low TTM PE of 11.21. The key growth driver for MSFT would be innovation and development toward general Windows and mobile devices. Going by past records, MSFT can continue to perform well with its products and deliver consistent returns to investors.
Vanguard Long-Term Corporate Bond ETF (VCLT) - Investors considering exposure to long-term corporate bonds con consider VLCT as a long-term investment option. The ETF has exposure to high-quality corporate bonds with a low expense ratio and a very attractive SEC yield. I had discussed this ETF in details in one of my previous articles.
In conclusion, global diversification, impending growth in most populated countries in the world, innovation and good management makes the above discussed companies an excellent long-term investment option for investors. I can say with a lot of conviction that over long term, these stocks and the discussed ETF will outperform the government bonds and might prove to be relatively safer as well.