Some of these forays, like high-yield bonds and blue chip dividend stocks, have performed well.
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Kelley Wright, editor of Investment Quality Trends, is a perennial fan of blue-chip dividend stocks with at least of 10 years of paying dividends without cutting them.
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Historically, dividend chasers have looked at blue chip stocks to find predictable dividend players.
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For instance, a number of high quality, blue chip stocks sport dividend yields comparable to long-term bonds AND they are selling at their best valuation levels in 20 years.
People perceive these as risks rather than opportunities, which cause some to engage in self-destructive behavior by buying overvalued supposed riskless assets, such as US Treasuries, and selling incredibly profitable, yet highly discounted dividend paying blue chip stocks, which provide safety and income at bargain prices.
It also paid a dividend far higher than the norm among stable U.S. blue-chip stocks, and that dividend was growing every year.
Also extraordinary is that the dividend yields on blue chip stocks remains in the 4% to 5% range.
The story is much the same among other popular dividend-paying blue chips.
In looking at a sample of American blue chips that often come up dividend screens, it is hard to make such a case.
Three European blue-chip companies boosted their proposed dividend payouts, signaling a growing desire to use cash reserves to woo investors after several lean years.
Blue chip companies, however, set sustainable dividend policies that will continue to hold up their share prices.
Additionally, Comcast initiated their first dividend in 2008 (the light blue shaded area).
" Blue-chips at the low end of their dividend yield range are "overvalued.
It also happens to be one of the highest-yielding major American blue chips, with a 3.5% dividend at current prices.
Now, what if the stock in question is not a blue chip but rather a REIT with a poorly covered dividend and a focus on the subprime mortgage business, which many expect to come under pressure?
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If Microsoft takes longer than I expect to rise to the top, we still get to collect its 3.3% dividend and benefit from owning one of the cheapest major blue chip stocks in the world.
But while blue-chip companies can often provide stability (and pay a nice dividend) bigger companies do not always make for better investments.
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