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5% Yielding Dividend Aristocrat Bargains You Don't Want To Miss

Sep. 23, 2023 7:35 AM ETCFR, EPD, FTS, FTS:CA, O, PM65 Comments


  • Rising long-term rates have hammered some sectors and have many investors worried about how companies will finance themselves in the future.
  • The rise in rates is primarily due to rising term premiums created by the bond market losing confidence in the Fed, achieving 2% long-term inflation.
  • Small companies are at far higher risk of having to refinance at much higher rates. Large dividend blue chips are the safe choice in a higher-rate world.
  • A-rated dividend aristocrats are the safest source of high-yield, including these 5 high-yield names you can safely buy today.
  • They yield 5.2%, have an A-credit rating, a 36-year dividend growth streak, and are expected to almost quadruple the S&P 500's returns through 2025, while yielding 3X as much.
  • Looking for a helping hand in the market? Members of The Dividend Kings get exclusive ideas and guidance to navigate any climate. Learn More »

Cash is King


Interest rates are on many investors' minds as the Fed meets this week to decide on rate policies and provide new economic forecasts.

In recent weeks and months, long-term interest rates have soared, helping trigger big corrections in utilities and


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This article was written by

Dividend Sensei profile picture

Dividend Sensei (Adam Galas) is an Army veteran and stock analyst with 20+ years of market experience.

He is a founding author of the investing group The Dividend Kings which focuses on helping investors safeguard and grow their money in all market conditions through the highest-quality dividend investments. Dividend Sensei and the team of analysts (Brad Thomas, Justin Law, Nicholas Ward, Chuck Carnevale, and Sebastian Wolf) help members invest more intelligently in dividend stocks. Features include: 13 model portfolios, buy ideas, company research reports, and a thriving chat community for readers looking to learn how to invest more intelligently in dividend stocks. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of PM either through stock ownership, options, or other derivatives. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (65)

dmark422 profile picture
Real TROUBLE ! Answer Cash mm fund 3 - 6 month treasuries
utilites down 5 % TODAY
dmark422 profile picture
Real trouble ahead for corporate earnings! Cash is King A 70's redue AKA stagflation
Andrew Feazelle profile picture
Negative term premium is from US treasuries being the world's safe haven, and from China/Japan buying so much of them back in the day. Now US debt keeps going up, and up, and China doesn't like our bonds as much. Without that negative term premium the 10 year would be like 6% about now. Likely we will follow Japan and do yield curve control at some point.

But the Fed just wants to put rates up just enough to see what happens but not enough to make the debt even worse. They want that excuse to eventually cut so they can keep monetizing US debt and debasing the currency. I think they can get away with one more leg of QE before the wheels start falling off, and home prices go to 600k for a starter home in Alabama.
The reason the dividends are high is because the stock prices have dropped so low. Cause and effect.
dmark422 profile picture
How's everyone doing? had lil health issue Im ok As we are seeing interest rates have been going up not down So all the interest sensitive is getting hit ie utg duk etc I am starting to think the Fed is going to break something ie A black Swan event and i am not even considering geopolitics. The MM balances suggest alot of others are thinking the same . Im ok with 5.4% This is going to be months to play out There is NO bull in sight only bear market conta rallies to my thinking.
Eileen Dover profile picture
Does anyone else see the titles of these articles (not just this author) and skip down past the initial filler at least half a page to get the names and the details before researching ? Absolutely not saying any of these articles are not of good value, just that all of them could be much shorter without much of the unnecessary filler.
steve7074 profile picture
@Eileen Dover Iften, I go straight to valuation, then go up.
Adam’s are ridiculous.
@Dividend Sensei whatever happened to your bullishness on LOW ?
steve7074 profile picture
@Turkeyman7 Did he say, he wasn’t ? Always find it hard to read all his articles in case he did.
I’ve owned since early 2020, in the low 90’s.for a yield on cost of almost 5%. Didn’t really know that until just now. That says these fast dividend growers are really good. A 14% growth doubles every 5 years.
I’m sure he’s not writing about it because it’s current yield is only 2.10%. Still down 10% from a recent high.
@Turkeyman7 LOW doesn’t pay a 5% dividend so they didn’t qualify for this article
The fed doesn’t control long term rates, just very short term. The key point you seem to miss ( as many others do, at least I didn’t see it) is that the market is waking up to the fact that we have an enormous amount of debt and massive deficits requiring lots of Treasury issuance which will pressure rates to entice buyers.
Yea, I see that! We had to do some home renovations and the wife, and I were able to get 0% for 21 mo. & 18mo. c/c for a total of $40K+ lines of credit. I was Not going to use my money in SGOV and with 800+ scores we sure weren't going to get great rates via a HELOC. or cash out refi.
@tensionpnuemo_69 You've got me curious -- how exactly did were you able to borrow at 0% interest? It sounds like you did not use your home equity?
Home Depot can finance purchases at 0% for up to 24 months
@vassille Not really 0% interest. The merchant/contractor provides a discount to the lender equivalent to the rate the lender wants to charge, and just marks up the cost of the project.

Don't hold me to the exact math, but say the lender wants to receive 10% on their loan. If a project really costs $90k, the merchant charges $100k, the lender provides a loan to the consumer at $100k, but only pays the merchant $90k.

The lender gets their 10% on the difference between the $100k the consumer pays and the $90k they send to the merchant/contractor.

You pay for it either way.
Daleem profile picture
Thanks for the article DS (Adam). You might want to update your’s and Brad’s Dividend Kings bios to reflect over 100K followers.
mizesa profile picture
When CDs and short term Treasuries yield the same with much less risk, why buy stocks as we head into recession?
Big Red Income Farmer profile picture
@mizesa exactly my thinking! I don’t understand how anybody could even read an article with a title like this. Doesn’t make much sense to my simple mind. Especially when it looks like a recession is becoming more and more likely. Risk free treasuries seem like the Way to go right now.
@mizesa capital appreciation. Stock market hit all tine highs shortly after the crash in 2020
mizesa profile picture
@Escaping the united states Go check. There is NO capital appreciation - only capital depreciation. CD and 3 month total returns are way higher. And the Fed isn't cutting rates as it did in 2000. It's still raising rates.
fhbecker profile picture
Think selling PUTs is the best method to acquire these companies below current market prices.
Just sold a 1/19/2024 $85 CFR Put for $4.20. Early next year, I will either own 100 CFR for $80.81 or have earned 15.8% (annualized) on the $8,081 the Put tied up.
Kamikaze Cash profile picture
@fhbecker Good thinking. Selling puts (if you have enough $ for 100 shares) is an excellent way to get shares cheaper than the current price. And if the put expires worthless, you just throw the post-tax premium right into shares anyway.
ephud profile picture

For those with margin accounts there is no cash tied up.
hafen profile picture
@ephud Buying power is cash. Don’t get caught up thinking your money isn’t on the hook to cover PUT exercise. People jumped out of window in 1929 for that very reason.
drcarl profile picture
"The Fed doesn't dare officially mention this model, which is available for free and far more accurate than any monthly inflation report from the government."

That is not true. You have no evidence that it is more accurate - or less accurate. Using selling prices is one source of price data. Using "baskets" is another. Both have their place - Yes, I do look at price data. But I actually prefer baskets.
Dividend Sensei profile picture

Fair enough, but it's very valuable to have 10 million sales points updated daily from over a dozen reliable sources.

Truflation attempts to match the basket the BLS is using in CPI.
I appreciate the effort it took for you to compile all this information and it was quite useful to help me understand the current rate environmental.

I guess if you are buying corporate bond funds that aren't investment grade, of medium duration (7-10 years) the yields should be maxed out right now and safe to buy?

Also, all of my short term preferred equities with call dates of 3-5 years seem to have been very stable over the last 2 months.

These 5 dividend aristocrats would have been a good recommendation in 1998. Past performance is not going to predict future performance, as we all know.
Dividend Sensei profile picture

Like Ben Graham recommended, I use the past, present, and consensus future to make recommendations.

If analysts say 5 stocks will earn 11% to 12% in the future then it's worth checking to see what they've done long-term.

After all, stable businesses are more likely to keep growing at a relatively stable rate.

If 5 stable blue-chips delivered 13% over 30 years and analysts today say 11% to 12% long-term, then its a reasonable check to make.

If analysts suddenly say Verizon is going to grow at 10% long-term that's something we should be skeptical of.

If they say 1% to 3% that's historically consistent.
@Dividend Sensei Tell that to W.P. Carey
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