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How To Build A 6% Yielding Sleep Well At Night Retirement Portfolio With These 15 Blue-Chips

Published Wed, 01 Jul 2020 17:52:50 -0400 on Seeking Alpha

Seeking AlphaDividend StrategyHow To Build A 6% Yielding Sleep Well At Night Retirement Portfolio With These 15 Blue-ChipsJul. 1, 2020 5:52 PM ET|| Includes: ABBV, AVB, BMO, BNS, BTI, D, ENB, EPD, ESS, EXR, MDU, MMM, MO, NFG, PRUby: Dividend SenseiDividend Sensei The Dividend KingsDividend ideas from a top team of analysts to help you sleep well at night.SummaryI've been asked to construct a safe 6% yielding blue-chip portfolio that retirees can trust in this recession and all that will come after it.
This article explains why EPD, ENB, MO, PRU, BTI, BNS, BMO, ABBV, D, NFG, AVB, EXR, MMM, MDU and ESS represent 15 high-yield, undervalued blue-chips that yield 5.7%.
This portfolio has analyst consensus growth of 6.3% CAGR, and probability-weighted expected returns of 11.4% CAGR over the next five years.
Unless you can personally stomach periods of intense short-term volatility, you shouldn't ever be 100% in stocks.
Adding a 15% cash/15% bond allocation to the portfolio reduces recession volatility by 40%, still yields 4.2% vs 1.6% for a 60/40 balanced stock/bond portfolio, and has 8.4% CAGR expected returns.

In my recent article, I explained the 3 safest 8+% yielding blue-chips retirees can trust in this recession.
In the comments, a reader asked me to do an article explaining how to not just select safe ultra-high yield blue-chips but also construct a fully diversified and prudently risk-managed portfolio that yields at least 5%.
The good news is that prudent risk management, such as the guidelines that Dividend Kings uses in all five of its portfolios (I also use it for my retirement portfolio) provides the flexibility for meeting a wide variety of immediate as well as long-term income needs.
Using these guidelines, which have been constructed over my six years as an analyst and with the input of professional asset managers with over 60 years of experience (who manage over $150 million for clients), we can safely build
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Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
ALTRIA GROUP 44.46   13.2 3.36 3.36 7.23
BRITISH AMERICAN TOBACCO 37.99   0.0 0.00 2.68 6.64
ENBRIDGE 34.70   19.7 1.76 2.21 6.38
ABBVIE 70.83   26.0 2.72 4.28 6.28
ENTERPRISE PRODUCTS 28.68   12.4 2.31 1.76 6.13
BANK OF NOVA SCOTIA 56.20   11.2 5.02 2.70 4.79
DOMINION RESOURCES 78.54   53.8 1.46 3.67 4.77
PRUDENTIAL FINANCIAL 88.22   9.0 9.82 4.00 4.61
BANK OF MONTREAL 72.60   10.2 7.15 3.10 4.33
NATIONAL FUEL GAS 48.74   14.4 3.39 1.74 3.53
3M 170.58   20.6 8.28 5.76 3.41
EXTRA SPACE STORAGE 117.00   34.7 3.37 3.60 3.11
MDU RESOURCES GROUP 27.98   19.0 1.47 0.81 2.91
AVALONBAY COMMUNITIES 209.53   31.6 6.62 6.08 2.89
ESSEX PROPERTY TRUST 324.02   52.2 6.21 7.80 2.43


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