20 High-Yield Rich Retirement Dream Stocks

Stock Market


Living happily ever after out on a lake

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It’s a tough time for income investors hoping to retire in comfort or even splendor in the coming years.

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JPMorgan

Real yields on bonds have been falling for 25 years and JPMorgan doesn’t expect positive real yields anytime soon.

The standard 60/40 retirement portfolio yields just 1.9%, down from a peak of 10% in 1981.

What does that mean for retirees?

Metric 60/40
Yield 1.9%
Growth Consensus 5.1%
LT Consensus Total Return 7.0%
Risk-Adjusted Expected Return 4.9%
Safe Withdrawal Rate 2.6%

(Source: FactSet Research)

That the 4% withdrawal rule is now 2.6%, a 35% reduction in your potential retirement income.

And lest you think that a roaring stock market might help you live off capital gains, Goldman, Moody’s, and Vanguard have some bad news for you.

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Daily Shot, Goldman Sachs

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Moody’s

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Ben Carlson

We are potentially facing a lost decade for stocks, which could make it even tougher to retire in dignity, much less comfort.

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CNBC

This is why 59% of Americans worry about retirement and 41% have given up hope of ever retiring.

But just because retiring in comfort is harder, doesn’t mean it’s impossible.

Let me show you how the 20 highest-yielding blue-chips on Wall Street are ready to help you earn the world’s safest 5.6% yield, and potentially help you retire in safety and splendor.

How To Find The Highest Safe Yield On Wall Street

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Dividend Kings

The Dividend Kings have 12 specialty watchlists for almost any investing style, time horizon, or goal.

If you want the best blue-chips, then the Phoenix watchlist is what you should look at.

  • the blue-chips most likely to rise like a Phoenix from the ashes of even the worst recession to soar to new heights

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Sorted By Highest Yield (DK Research Terminal)

  • green = potentially good buy or better
  • blue = potentially reasonable buy
  • yellow = hold
  • red = potential trim/sell

You can sort each watchlist by 16 fundamental metrics. Everything from

  • yield
  • discount to fair value
  • dividend growth streak
  • safety and quality scores
  • consensus long-term return potential
  • 12-month return potential (consensus and fundamentally justified)

Sorting the Phoenix list by yield allows us to quickly find the 20 highest yielding blue-chips you can safely buy in today’s challenging market.

20 High-Yield Rich Retirement Dream Stocks

(Sources: DK Research Terminal)

Lest you think that it’s crazy to be recommending buying anything in a correction, let’s remember that it’s always and forever a market of stocks, not a stock market.

2022 YTD Returns

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Portfolio Visualizer Premium

These 20 blue-chips are up almost 4% while the market is down 6%, for 10% outperformance during what could just be the start of one of the greatest value rotations in market history.

  • beating the Nasdaq by 14%
  • beating the aristocrats by 9%

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Daily Shot

Value became the most undervalued relative to growth in US history in December and guess what does the best when the Fed starts raising rates?

Not just value…but quality value.

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Factor Research

So let’s take a look at the quality of these high-yield blue-chips.

Company Quality Rating (out Of 13) Quality Score (Out Of 100) Dividend/Balance Sheet Safety Rating (out of 5) Safety Score (Out Of 100) Dependability Rating (Out Of 5) Dependability Score (out Of 100)
Magellan Midstream Partners (uses K-1) 13 83% 5 85% 4 82%
Enterprise Products Partners (uses K-1 tax form) 13 86% 5 90% 5 83%
Altria 13 88% 5 91% 5 83%
Enbridge 13 84% 5 87% 5 85%
Legal & General Group 11 66% 4 61% 5 78%
British American Tobacco 13 87% 5 84% 5 90%
Kinder Morgan 10 71% 4 74% 4 70%
Pembina Pipeline Corp 11 82% 5 89% 4 79%
TC Energy 11 74% 4 79% 4 73%
Atlantica 10 71% 4 66% 4 80%
IBM 12 85% 5 87% 5 85%
VICI Properties 10 68% 4 67% 3 70%
Verizon 12 83% 5 86% 4 80%
Manulife Financial 12 82% 5 83% 3 83%
Simon Property Group 10 64% 4 63% 3 64%
Realty Income 13 89% 5 93% 5 88%
LyondellBasell Industries 10 73% 4 76% 3 69%
Bank of Nova Scotia 12 92% 5 98% 5 90%
Northwest Natural Holding 11 82% 5 82% 4 90%
Unilever 12 78% 4 75% 5 83%
Average 11.6 Super SWAN 79.4% 4.6 Very Safe 80.8% 4.3 Very Dependable 80.3%

(Sources: DK Research Terminal)

These blue-chips average 11.6/13 Super SWAN quality.

  • the dividend aristocrats average 11.7

And take a look at how dependable these Super SWANs are when it comes to dividend safety.

Rating Dividend Kings Safety Score (147 Point Safety Model) Approximate Dividend Cut Risk (Average Recession)

Approximate Dividend Cut Risk In Pandemic Level Recession

1 – unsafe 0% to 20% over 4% 16+%
2- below average 21% to 40% over 2% 8% to 16%
3 – average 41% to 60% 2% 4% to 8%
4 – safe 61% to 80% 1% 2% to 4%
5- very safe 81% to 100% 0.5% 1% to 2%
Rich Retirement Blue-Chips 81% 0.50% 2.0%
Risk Rating Low-Risk (74th industry percentile consensus) – Good Risk Management BBB+ stable outlook credit rating 5.3% 30-year bankruptcy risk

15% OR LESS Max Risk Cap Recommendation (Each)

(Sources: DK Research Terminal)

The probability of these high-yield blue-chips cutting their dividends in the average historical recession since WWII is 0.5%.

  • the probability of all of them cutting is approximately 1 in 1.1X 10^46
  • 1 in 11 billion trillion trillion trillion

The probability of a dividend cut in even a Great Recession or Pandemic level downturn is about 2%.

  • probability of all of them cutting is about 1 in 9.5 X 10^33
  • 1 in 95 billion trillion trillion

Company Long-Term Risk Management Consensus Industry Percentile Risk-Rating Risk-Management Rating S&P Credit Rating

30-Year Bankruptcy Risk

Magellan Midstream Partners (uses K-1) 70% Low Good BBB+ 5.00%
Enterprise Products Partners (uses K-1 tax form) 77% Low Good BBB+ 5.00%
Altria 69% Low Above-Average BBB 7.50%
Enbridge 87% Low Very Good BBB+ 5.00%
Legal & General Group 85% Low Very Good A 0.66%
British American Tobacco 82% Low Very Good BBB+ 5.00%
Kinder Morgan 60% Low Above-Average BBB 7.50%
Pembina Pipeline Corp 70% Low Good BBB 7.50%
TC Energy 69% Low Above-Average BBB+ 5.00%
Atlantica 82% Medium Very Good BB+ 14.00%
IBM 87% Medium Very Good A- 2.50%
VICI Properties 63% Medium Above-Average BB 17.00%
Verizon 78% Low Good BBB+ 5.00%
Manulife Financial 82% Low Very Good A 0.66%
Simon Property Group 49% Medium Average A- 2.50%
Realty Income 66% Low Above-Average A- 2.50%
LyondellBasell Industries 71% Low Good BBB 7.50%
Bank of Nova Scotia 89% Low Very Good A+ 0.60%
Northwest Natural Holding 50% Medium Average NA 5.00%
Unilever 93% Low Exceptional A+ 0.60%
Average 74.0% Low Good BBB+ stable 5.30%

(Sources: DK Research Terminal)

According to six rating agencies, these blue-chips have long-term risk management in the top 26% of their industries.

They also are rated BBB+ stable by S&P, meaning a 5.3% average risk of going bankrupt in the next 30 years.

  • The approximate risk of all 20 of them going to zero are 1 in 3.3 X 10^25
  • 1 in 33 trillion trillion

Company Dividend Growth Streak (Years) ROC (Greenblatt) ROC Industry Percentile

13-Year Median ROC

Magellan Midstream Partners (uses K-1) 20 NA NA NA
Enterprise Products Partners (uses K-1 tax form) 23 NA NA NA
Altria 52 712% 85% 416%
Enbridge 26 NA NA NA
Legal & General Group 10 NA NA NA
British American Tobacco 23 194% 75% 175%
Kinder Morgan 3 NA NA NA
Pembina Pipeline Corp 9 NA NA NA
TC Energy 21 NA NA NA
Atlantica 6 NA NA NA
IBM 26 47% 64% 134%
VICI Properties 3 NA NA NA
Verizon 15 30% 72% 27%
Manulife Financial 8 NA NA NA
Simon Property Group 1 NA NA NA
Realty Income 26 NA NA NA
LyondellBasell Industries 8 43% 82% 42%
Bank of Nova Scotia 0 NA NA NA
Northwest Natural Holding 66 NA NA NA
Unilever 6 87% 94% 80%
Average 17.6 185.4% 78.7% Wide Moat 145.7%

(Sources: DK Research Terminal)

Ben Graham considered a 20-year dividend growth streak to be a sign of excellence, and these blue-chips are getting very close to that.

Joel Greenblatt considered return on capital his gold standard proxy for quality and moatiness.

  • return on capital = annual pre-tax profit/operating capital (the money it takes to run the business)

These 20 high-yield blue-chips have ROC of 185% in the last quarter, in the top 21% of their industry peers.

Over the last 13 years, their median ROC was 146%.

  • indicating strengthening moats
  • and that for every $1 it takes to run the business, they generate $1.46 in annual pre-tax profit
  • a $1 investment by these companies is recouped in 8.3 months

In other words, according to two of the greatest investors in history, as well as six rating agencies, these are indeed some of the world’s highest quality and safest high-yield blue-chips.

And here’s why you might want to buy some or all of them today.

Company Discount To Fair Value PE/EBITDA/FFO 2021 PEG 2021 12-Month Consensus Total Return Potential

12-Month Fundamentally Justified Upside Total Return Potential

Magellan Midstream Partners (uses K-1) 33.0% 9.0 3.9 16.8% 57.8%
Enterprise Products Partners (uses K-1 tax form) 29.4% 7.4 1.7 27.2% 49.4%
Altria 19.3% 10.4 2.0 13.3% 31.0%
Enbridge 13.6% 8.6 1.4 13.3% 22.4%
Legal & General Group 22.1% 8.3 2.1 25.5% 35.0%
British American Tobacco 32.1% 9.7 1.1 19.6% 53.6%
Kinder Morgan 10.5% 7.4 1.1 17.4% 17.9%
Pembina Pipeline Corp 24.7% 9.2 1.8 10.4% 38.9%
TC Energy 2.5% 8.8 1.6 7.8% 8.1%
Atlantica 3.3% 5.8 0.8 32.0% 8.9%
IBM 6.6% 13.1 1.4 19.0% 12.2%
VICI Properties 6.3% 14.3 2.3 33.0% 11.8%
Verizon 9.7% 9.8 3.0 16.3% 15.3%
Manulife Financial 17.8% 7.8 0.9 19.8% 26.4%
Simon Property Group 8.3% 12.2 2.3 26.0% 13.7%
Realty Income 7.2% 17.1 2.6 21.0% 12.0%
LyondellBasell Industries 21.6% 6.8 0.5 12.9% 32.0%
Bank of Nova Scotia 0.8% 11.2 1.8 6.8% 5.1%
Northwest Natural Holding 16.6% 18.1 3.1 21.7% 24.1%
Unilever 9.9% 18.2 2.8 16.4% 14.9%
Average 14.8% 10.6 1.90 18.8% 24.5%

(Sources: DK Research Terminal)

The S&P 500 is 18% historically overvalued according to JPMorgan.

These blue-chips are 15% undervalued.

They trade at a P/E of 10.6 while the market trades at 20.

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FAST Graphs, FactSet Research

These blue-chips are literally trading at Great Recession low valuations.

Their PEG is 1.9 vs the S&P 500’s 2.35.

Analysts expect them to deliver 19% total returns in just the next 12 months.

And they are so undervalued that if they all returned to fair value and grew as expected, 25% total returns in the next year are possible.

So here we have world-class quality companies, trading at incredible bargains, with some of the world’s safest dividends. What kind of yield is on offer?

Company Yield FactSet Long-Term Consensus Growth Rate Long-Term Consensus Return Potential

Risk-Adjusted Expected Returns

Magellan Midstream Partners (uses K-1) 8.5% 2.3% 10.8% 7.6%
Enterprise Products Partners (uses K-1 tax form) 7.7% 4.4% 12.1% 8.5%
Altria 7.1% 5.3% 12.4% 8.7%
Enbridge 6.6% 6.0% 12.6% 8.9%
Legal & General Group 6.5% 4.0% 10.5% 7.4%
British American Tobacco 6.3% 8.7% 15.0% 10.5%
Kinder Morgan 6.3% 7.0% 13.3% 9.3%
Pembina Pipeline Corp 6.0% 5.2% 11.2% 7.8%
TC Energy 5.5% 5.5% 11.0% 7.7%
Atlantica 5.4% 7.7% 13.1% 9.2%
IBM 5.1% 9.5% 14.6% 10.2%
VICI Properties 5.0% 6.3% 11.3% 7.9%
Verizon 4.8% 3.3% 8.1% 5.7%
Manulife Financial 4.8% 9.0% 13.8% 9.7%
Simon Property Group 4.6% 5.4% 10.0% 7.0%
Realty Income 4.4% 6.5% 10.9% 7.6%
LyondellBasell Industries 4.4% 12.5% 16.9% 11.8%
Bank of Nova Scotia 4.3% 6.2% 10.5% 7.4%
Northwest Natural Holding 4.2% 5.9% 10.1% 7.0%
Unilever 4.0% 6.4% 10.4% 7.3%
Average 5.6% 6.4% 11.9% 8.4%

(Sources: DK Research Terminal)

This isn’t just a 5.6% yielding portfolio, it’s arguably the safest 5.6% yielding portfolio in the world.

And what’s more, analysts expect it to generate long-term income growth of 6.4%, about 3X the 30-year rate of inflation the bond market is currently expecting.

And that means a long-term return potential of 11.9% CAGR with a conservative risk-adjusted expected return of 8.4% CAGR.

Investment Strategy Yield LT Consensus Growth LT Consensus Total Return Potential Long-Term Risk-Adjusted Expected Return

Long-Term Inflation And Risk-Adjusted Expected Returns

20 Rich Retirement Blue-Chips 5.6% 6.4% 11.9% 8.3% 6.1%
Safe Midstream + Growth 3.3% 8.5% 11.8% 8.3% 6.0%
REITs 3.0% 6.5% 9.5% 6.6% 4.4%
High-Yield 2.7% 11.3% 14.0% 9.8% 7.5%
Dividend Aristocrats 2.2% 8.9% 11.1% 7.8% 5.5%
Value 2.1% 12.1% 14.1% 9.9% 7.7%
10-Year US Treasury 2.0% 0.0% 2.0% 1.4% -0.8%
60/40 Retirement Portfolio 1.9% 5.1% 7.0% 4.9% 2.7%
REITs + Growth 1.8% 8.9% 10.6% 7.4% 5.2%
High-Yield + Growth 1.7% 11.0% 12.7% 8.9% 6.6%
Dividend Growth 1.6% 12.6% 14.2% 9.9% 7.7%
S&P 500 1.5% 8.5% 10.0% 7.0% 4.8%
Nasdaq (Growth) 0.7% 10.7% 11.4% 8.0% 5.7%

(Sources: Morningstar, FactSet, YCharts)

That’s not just more than the S&P 500, but also the aristocrats and even the tech-dominated Nasdaq!

What evidence is there that these 20 high-yield Super SWANs can actually deliver close to 12% long-term annual returns?

Historical Returns Since 2002 (Annual Rebalancing)

The future doesn’t repeat, but it often rhymes. – Mark Twain

Past performance is no guarantee of future results, but studies show that blue-chips with relatively stable fundamentals over time offer predictable returns based on yield, growth, and valuation mean reversion.

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Portfolio Visualizer Premium

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Portfolio Visualizer Premium

During the last great value rotation, these blue-chips beat the market for 11 consecutive years.

Rule number one: most things will prove to be cyclical.

Rule number two: some of the greatest opportunities for gain and loss come when other people forget rule number one.” – Howard Marks

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Portfolio Visualizer Premium

And across every time frame, these 20 high-yield rich retirement dream stocks delivered very consistent 12% annual average rolling returns, far better than the S&P 500.

And guess what? They did it with 1% less annual volatility!

  • 13.8% average annual volatility vs 14.7% for the S&P 500
  • 46% better negative volatility-adjusted excess total returns

Portfolio 2002 Income Per $1,000 Investment 2021 Income Per $1,000 Investment Annual Income Growth Starting Yield 2021 Yield On Cost
20 Rich Retirement Blue-Chips $50 $504 12.93% 5.0% 50.4%

(Source: Portfolio Visualizer Premium)

Thanks to dividend reinvestment and annual rebalancing, these 20 blue-chips not only delivered 12% total returns but 13% annual income growth.

Analyst Consensus Income Growth Forecast Risk-Adjusted Expected Income Growth Risk And Tax-Adjusted Expected Income Growth

Risk, Inflation, And Tax Adjusted Income Growth Consensus

12.9% 9.1% 7.7% 5.3%

(Source: DK Research Terminal, FactSet)

And guess what? Analysts expect these blue-chips to keep delivering 12.9% income growth over time, which is 5.3% adjusted for inflation, taxes, and the risk of these companies not growing as expected.

  • S&P 500’s historical inflation-adjusted dividend growth rate is 2% to 3%
  • analysts expect a 60/40 to deliver 0.6% inflation-adjusted income growth over time

Bottom Line: These 20 High-Yield Blue-Chips Can Help You Retire In Safety And Splendor

Retiring in dignity or even safety and splendor isn’t as easy as it once was. But it’s also not impossible.

Not when you harness the power of the world’s highest quality and safest high-yield blue-chips to create one of the safest 5.6% yielding portfolios on earth.

These 20 high-yield Super SWANs not only offer 5.6% very safe yield but also potentially 11.9% long-term returns that analysts think will beat the S&P, aristocrats, and even the Nasdaq in the coming years and decades.

Just as they’ve delivered 12% annual returns for the last 20 years.

  • they are outperforming the S&P 500 by 10% in 2022 so far
  • and the Nasdaq by 14%
  • and the aristocrats by 9%

And when combined with index funds to achieve an optimally diversified and risk-managed portfolio, it can also help the typical retired couple potentially achieve

  • and extra $1.2 million in inflation-adjusted income over 30 years
  • an extra $6.3 million in inflation-adjusted wealth
  • turn $555K in median retirement savings into $8.5 million, adjusted for inflation

Interests rates are at historic lows, but so what?

Maybe it’s time to stop cursing your bad luck or the Fed and start making your own luck.

Luck is what happens when preparation meets opportunity.” – Roman Philosopher Seneca the Younger

With these 20 high-yield rich retirement blue-chips you don’t have to worry about what interest rates, the economy, or the stock market will do next.

Because your hard-earned money is protected by some of the world’s highest quality and safest companies, run by skilled and adaptable management teams.

Companies with a strong track record of long-term risk management that have successfully adapted and overcome numerous recessions, and industry challenges over the last 20 years.

If you’re tired of losing sleep at night due to worries about inflation, interest rates, the Fed, or the stock market, it’s time to stop gambling and start investing.

It’s time to harness the world’s highest-yielding safe blue-chips and retire in safety and splendor.



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