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Buy These 6 Ultra High Yielding Dividend Aristocrats Before It's Too Late
BTIBAT(BTI) Seeking Alpha·2024-09-07 11:00

Group 1 - Market volatility has returned, highlighted by Nvidia's (NVDA) 9.5% plunge in a single day, resulting in a 280billionlossinmarketcapitalization,equivalenttoChevrons(CVX)entirevalue[1]Bigtechcompaniesarecurrentlyfacingsignificantchallenges,whilehighyieldaristocratsarethriving,reminiscentofthetechcrashwhenhighyieldvaluestockssurged[1][2]Thecurrentmarketenvironmentisnotatechbubble,asthemegacapcompaniesarebackedbysubstantialcashreserves,with280 billion loss in market capitalization, equivalent to Chevron's (CVX) entire value [1] - Big tech companies are currently facing significant challenges, while high-yield aristocrats are thriving, reminiscent of the tech crash when high-yield value stocks surged [1][2] - The current market environment is not a tech bubble, as the mega-cap companies are backed by substantial cash reserves, with 1.2 trillion on their balance sheets [3][4] Group 2 - High-yield aristocrats like Realty Income (O), Enterprise Products (EPD), and British American Tobacco (BTI) are trading at historically low valuations, presenting potential investment opportunities [2][24] - The expected earnings growth for big tech is projected at 23% for the next year, indicating that these companies are not in a bubble despite current market conditions [8][9] - The bond market is pricing in potential rate cuts, which could indirectly benefit high-yield aristocrats by stimulating consumer spending and improving economic conditions [12][15] Group 3 - The analysis indicates that ultra-yield aristocrats are currently undervalued, with an average yield of 6.7%, significantly higher than the S&P's yield [33][36] - Historical performance shows that these aristocrats have delivered better volatility-adjusted returns compared to the S&P, with a lower risk profile [38][41] - The consensus return potential for these aristocrats is projected at 56% over the next few years, suggesting strong growth prospects if they return to historical fair value [46][47]