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4 Buffett Fat Pitch High-Yield Blue-Chip Bargains Set To Soar

Published Mon, 07 Dec 2020 16:26:45 -0500 on Seeking Alpha

Seeking AlphaDividend Ideas4 Buffett Fat Pitch High-Yield Blue-Chip Bargains Set To SoarDec. 7, 2020 4:26 PM ET|| Includes: ABBV, BTI, EPD, MMPby: Dividend SenseiDividend Sensei The Dividend KingsMaximize your income with the world’s highest-quality dividend investments SummaryJust because the S&P 500 is 40% historically overvalued doesn't mean you can't still find plenty of Buffett style "fat pitch" high-yield blue-chip bargains.
9/12 quality blue-chip BTI yields a safe 7.2%, is 51% undervalued, and analysts expect it could deliver 5-year total returns of 20.5% CAGR, 7.3X that of the S&P 500.
10/12 quality SWAN MMP yields a safe 9.2%, is 41% undervalued, and analysts expect it could deliver five-year total returns of 15.9% CAGR, 5.8X that of the S&P 500.
11/12 quality Super SWAN aristocrat ABBV yields a safe 4.8%, is 31% undervalued, and analysts expect it could deliver 5-year total returns of 18.5% CAGR, 6.6X that of the S&P 500.
12/12 quality Ultra SWAN EPD yields a very safe 8.6%, is 39% undervalued, and analysts expect it could deliver five-year total returns of 16.7% CAGR, 6.0X that of the S&P 500.
(Source: Imgflip)
Since bottoming on Oct. 28, the stock market has been red hot. November was the best month for the Dow since 1987 and deep value blue chips have done even better.

Of course, this strong rally means that the broader market is now in a bubble.
S&P 500 Valuation Profile
Year EPS Consensus YOY Growth Forward PE Blended PE Overvaluation (Forward PE) Overvaluation (Blended PE)
2020 $137.72 -15% 26.8 27.2 62% 60% 2021 $168.63 22% 21.9 24.4 33% 43% 2022 $195.79 16% 18.9 20.4 14% 20% 12-month forward EPS 12 Month Forward PE Historical Overvaluation PEG 20-Year Average PEG S&P 500 Dividend Yield 25-Year Average Dividend Yield
$160.09 23.1 40% 2.72 2.35 1.59% 2.05%
(Sources: Dividend Kings S&P 500 Valuation & Total Return Tool, FactSet Research, FAST Graphs,... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
BRITISH AMERICAN TOBACCO 37.99   0.0 0.00 2.68 6.64
ABBVIE 70.83   26.0 2.72 4.28 6.28
MAGELLAN MIDSTREAM PARTNERS 65.61   11.0 5.99 4.05 6.20
ENTERPRISE PRODUCTS 28.68   12.4 2.31 1.76 6.13

BRITISH AMERICAN TOBACCO - BTI
BRITISH AMERICAN TOBACCO - BTI  


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