Prudential Financial: Own A Piece Of This 'Blue-Chip' Rock That Yields 7%

Jun. 20, 2020 7:00 AM ETPrudential Financial, Inc. (PRU)211 Comments

Summary

  • This is one of the best high-yield, blue-chip investments you can make right now.
  • Not only is the 7% yield generous and safe, but analysts expect it to grow about 9% CAGR over time.
  • From the best valuation in 12 years, approximately 36% undervalued, PRU is expected to deliver about 16% CAGR long-term total returns.
  • This idea was discussed in more depth with members of my private investing community, iREIT on Alpha. Get started today »

This article was coproduced with Dividend Sensei and edited by Brad Thomas.

Prudential Financial (NYSE:PRU) is a Fortune Global 500 company that was formed more than 140 years ago and today provides insurance, investment management, and other financial products throughout the U.S. and 40 other countries. In the U.S., "Prudential's iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century."

Source

As a child, I remember watching commercials on TV featuring Prudential, and the famous "get a piece of the rock" slogan. I found this interesting graphic below that illustrates the evolution of the "Rock of Gibraltar logo" that has become "more clean and simplistic."

Source

As you know, I'm always looking to diversify my retirement portfolio, beyond REITs, and this week, I reached out to Dividend Sensei to assist me with an article on Prudential.

The company was originally a recommendation from our fellow Dividend King co-founder, Chuck Carnevale, and now, a new Phoenix watchlist company (the latest addition to the DK Phoenix portfolio and also a recent purchase from both me and Dividend Sensei).

Dividend Sensei Real-Money Phoenix Portfolio Bucket

(Source: Morningstar) 27% cash/bond allocation not shown

Phoenix bought a starter position in PRU and intends to buy it each week for the next three weeks. If it were to suffer a large enough correction, we'd buy it every week for the next month.

Why are we so bullish on Prudential? Simply put, this is one of the best high-yield, blue-chip investments you can make right now.

Not only is the 7% yield generous and safe, but analysts expect it to grow about 9% CAGR over time.

What's more, from the best valuation in 12 years, approximately 36% undervalued, PRU is expected to deliver about 16% CAGR long-term total returns, a market-smashing 16X what the incredibly overvalued

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This article was written by

Brad Thomas profile picture
106.92K Followers
Author of iREIT on Alpha
The #1 Service For Safe and Reliable REIT Income

Brad Thomas is the CEO of Wide Moat Research ("WMR"), a subscription-based publisher of financial information, serving over 10,000 investors around the world. WMR has a team of experienced multi-disciplined analysts covering all dividend categories, including REITs, MLPs, BDCs, and traditional C-Corps.

The WMR brands include: (1) iREIT on Alpha (Seeking Alpha), and (2) The Dividend Kings (Seeking Alpha), and (3) Wide Moat Research. He is also the editor of The Forbes Real Estate Investor

Thomas has also been featured in Barron's, Forbes Magazine, Kiplinger’s, US News & World Report, Money, NPR, Institutional Investor, GlobeStreet, CNN, Newsmax, and Fox. 

He is the #1 contributing analyst on Seeking Alpha in 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, and 2022 (based on page views) and has over 106,000 followers (on Seeking Alpha). Thomas is also the author of The Intelligent REIT Investor Guide (Wiley) and is writing a new book, REITs For Dummies. 

Thomas received a Bachelor of Science degree in Business/Economics from Presbyterian College and he is married with 5 wonderful kids. He has over 30 years of real estate investing experience and is one of the most prolific writers on Seeking Alpha. To learn more about Brad visit HERE.

Disclosure: I am/we are long PRU. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Dividend Sensei is also Long PRU. The Dividend Kings Phoenix Portfolio holds TRV and CB.

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