3 Reasons You Should Own Microsoft But Buy These 2 Faster-Growing Tech Blue Chips Today

3 Reasons You Should Own Microsoft But Buy These 2 Faster-Growing Tech Blue Chips Today

Posted On September 22, 2021 3:18 am

Microsoft is one of the highest quality companies on earth, and Satya Nadella is one of the greatest CEOs in history.

Microsoft is as close to a “must own, buy and hold forever” blue-chip as exists on Wall Street. Analysts expect 12.6% CAGR long-term returns, better than the Nasdaq’s 11.3% CAGR.

However, today it’s 56% overvalued compared to the Nadella era norms, meaning that MSFT is a relatively poor place for new money today.

In contrast, these two faster-growing blue-chips are 10% to 30% undervalued and expected to grow 21.2% to 31.3% CAGR, much faster than MSFT’s 11.8% CAGR.

This means that these tech blue-chips if combined with a high-yield blue-chip like BTI, could deliver 3X the risk-adjusted expected returns of MSFT as well as 20% to 27% CAGR returns over the next five years. Just as they’ve done since 2013, and all while you enjoy a safe 4.1% yield.

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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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