Are These 2 Stocks Better Than Bonds?

Can a case really be made to use blue-chip dividend-paying stocks as bond substitutes? This is a very controversial question that has existed in the investment community since I have been involved over the past 50 years. Bond purists can get angry and even antagonistic if you try to suggest that stocks can be used as bond substitutes. On the other hand, with interest rates at all-time lows, bonds are hardly the income-producing vehicles that they historically have been. This begs the question, do we need to actually look for alternatives to bonds if we need income? My answer is somewhere in between. I am not against bonds, but I am against investing in things that do not make any sense or that do not offer any opportunity to get a fair return. I think that is the case for bonds today. Interest rates are simply too low, which makes blue-chip dividend-paying stocks with yields above 3% attractive alternatives, at least temporarily. In this video, I will present two blue-chip dividend-paying stocks that I believe serve those purposes.

The two companies I will review in this video are Kellogg Co (K) and General Mills (GIS).

Stocks Kellogg and General Mills

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(Video length 00:21:37)