By: Dividend Sensei
Warren Buffett stands a titan among investing legends, generating over 16% annual inflation-adjusted returns for 55 years. That’s a 3,908 fold increase in real wealth.
While I don’t agree with all Berkshire investments, when it comes to a recent $2 billion BRK investment, I’m in complete agreement with the Oracle of Omaha.
This anti-bubble blue-chip represents a wonderful company, at a wonderful price. It’s a classic Buffett-style “fat pitch” and I’ve swung away to the tune of $12,000 in my retirement portfolio.
This blue-chip is literally priced for zero growth forever, while analysts expect 6.1% long-term growth. That’s a growth rate that has historically supported an 18 to 20X PE while today it trades at just 8.4X earnings.
Even factoring in its risk profile, analysts think this company could deliver 158% total returns over the next 5 years, 5X more than the S&P 500 making this company one of the most reasonable and prudent Buffett blue-chip buys you can make.