Video Discription |
I'm excited to share 2 core dividend stocks that are trading at reasonable values right now. I'm also excited to share a bond that I'm actively buying, while analyzing the tradeoffs between dividend stocks and bonds.
#dividend #stocks #bonds
Timestamps:
0:00 Introduction
0:45 I believe Coca-Cola (KO) is a reasonable value core dividend stock right now.
0:57 Investing Rule: I like to buy each of my core stocks at least once per year.
1:12 I also believe Procter & Gamble (PG) is trading at a fair, reasonable value.
1:39 Dividend stocks are doing great, despite the rocky economy.
1:56 PepsiCo (PEP) recently reported very strong earnings, my number 3 dividend stock.
2:31 Sometimes, especially during bull markets, people may put down dividend stock investing.
3:20 McDonalds (MCD) just increased their dividend by 10%! My simple dividend yield-on-cost is 8.27% on my first tranche of MCD from 2011.
5:17 SEGMENT 1: HOUSEKEEPING AND CHANNEL UPDATE
6:10 SEGMENT 2: AGENDA AND VIDEO SUMMARY
7:08 With inflation surging, Treasury Bonds are compelling alternatives to dividend stocks for some investors.
7:59 Because we live in a wacky world, I structure my portfolio for lower risk and lower volatility.
8:35 SEGMENT 3: RECENT PEPSICO (PEP) TRADE - Core dividend stock that's not on sale. It's doing great!
9:50 PEP's starting dividend yield is 2.7%, and the payout ratio is 68%. The 5-year CAGR is 7.4%.
10:14 SEGMENT 3: TWO ADDITIONAL CORE DIVIDEND STOCKS THAT I'M LOOKING AT
10:30 COCA-COLA (KO) Dividend Stock Analysis
10:49 Forward PE is 22.64, next year 21.75.
10:57 The starting dividend yield is 3.2%, which I love. (Although dividend growth is slow.)
11:30 I'm thinking of 20-Year Treasury Bonds as a compelling alternative to stocks like KO. (Not a replacement, but a complement.)
11:52 20 Year Treasury Bond Chart
12:33 I look at Treasury Bonds as being very low risk.
13:30 PROCTER & GAMBLE (PG) Dividend Stock Analysis
14:23 Dividend stocks are doing so well right now.
14:32 Starting dividend yield is 2.9%, the payout ratio is 62%, and the 5-year CAGR is 5.78%.
15:15 SEGMENT 4: THOUGHTS ON TREASURY BONDS
15:30 Treasuries held to maturity will not lose raw dollar value.
15:49 I don't mind spending interest from Treasuries, but I have a harder time spending dividend income (I'd rather reinvest).
16:29 Treasuries provide cash flow while lowering portfolio volatility.
16:52 I will participate in the 19-Year 10-Month Treasury Auction.
17:52 SEGMENT 5: DIVIDEND STOCKS VS. BONDS ANALYSIS
18:02 Treasury Bonds and Core Dividend Stocks have different tax consequences.
18:40 MODEL 1: SIMPLE YIELD ON COST MODEL
20:48 Simple dividend yield on cost after 20 years is 8.34%.
21:22 I see the inflection point as years 6-8 as compared to the 20-Year Treasury.
22:40 Because my investing horizon is more than 8 years, I skew towards dividend stocks vs. Treasuries.
23:23 MODEL 2: TRUE YIELD ON COST MODEL (WITH DIVIDEND REINVESTMENT)
23:58 To be fair, I'm not reinvesting interest from Treasuries for comparison.
24:22 I see the inflation point happening in years 4-6.
24:42 I see dividend stocks making more sense with at least 6 years of time before retirement.
25:19 After 20 years with full dividend reinvestment, there is a 13.6% true yield on cost.
27:18 DISCLOSURE AND DISCLAIMER
DISCLOSURE: I am long Coca-Cola (KO), Procter & Gamble (PG), McDonalds (MCD), and PepsiCo (PEP). I own these stocks in my personal dividend stock portfolio. I’m also long Treasury Bonds.
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