The 10-Year Treasury Bond Yields Nearly 5% Right Now. Here's Why I'd Still Choose PepsiCo for Passive Income.
The safety of government-guaranteed bonds is compelling to be sure. There are just a couple of nagging drawbacks that I can't live with. Maybe you can.
Overview
This year's rapid rise in interest rates has given income investors much to think about. Longer-dated bonds now offer bigger yields than some of the market's highest-regarded dividend stocks. For instance, 10-year Treasuries are now paying 4.8% (and are headed toward 2023's multi-year peak of just under 5%).
By contrast, blue chip beverage company PepsiCo (NASDAQ: PEP) sports a forward-looking dividend yield of only 4.3%. Nevertheless, I'd still choose PepsiCo's stock as a long-term passive income play. Here's why.
Details
Don't misread the message. If you prefer a government-backed guarantee of recurring income as well as stable value of your principal investment, Treasuries are your best bet. Just understand the two key differences between these two very different types of holdings before diving into one over the other though.
Source
Originally published at www.fool.com.