3 Reasons Warren Buffett Loves This High-Yield Blue-Chip Bargain

3 Reasons Warren Buffett Loves This High-Yield Blue-Chip Bargain

Posted On April 14, 2021 3:28 am

The market keeps chasing rising earnings expectations higher and is now 35% overvalued. Dangerous speculative bubbles are everywhere.

But disciplined long-term investors, such as Warren Buffett, know that it’s a market of stocks, not a stock market, and blue-chip bargains are always available.

That’s the case with this 30% undervalued 11/12 Super SWAN quality high-yield, a company with dividends so dependable they haven’t been cut in at least 34 years.

This company’s blockbuster medication is expected to achieve $27 billion in 2026 sales, becoming the best-selling drug in history. But even after the 2028 patent cliff, its strong pipeline and 5% to 7% annual buyback potential make analysts believe it can grow at 9.6% over the long term.

Today this stock is one of the best Buffett blue-chip bargains you can buy, with more than 2X the market’s yield, 5X the risk-adjusted expected returns for the next five years, and 13% long-term consensus total return potential. That’s 5% more than the S&P 500 and 2.4% more than the dividend aristocrats. For anyone comfortable with the risk profile, it’s a potential 100% A+ exceptional long-term investment idea.

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About author

Dividend Sensei

I'm an Army veteran and former energy dividend writer for The Motley Fool. I'm a proud co-founder of Wide Moat Research, Dividend Kings, and the Intelligent Dividend Investor. My work can be found on Seeking Alpha, Dividend Kings, iREIT, and the Intelligent Dividend Investor. My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams and enrich their lives. With 24 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and income streams and achieving long-term financial goals.

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