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Wonderful companies at fair prices has been Buffett’s mantra and this screen gives you that.
These are large cap stocks that are selling at great price. They may not be undervalued in the classical sense, but these are quality companies with pedigree, and one can reasonably expect them to continue to grow and do well for the shareholders for long time to come.
The Buffettology Inspired screener is based on criteria described in the bestselling Buffettology book and mimics Warren Buffett’s investing approach. The screener insists that company should have a 10-year track record of generally increasing Earnings Per Share with no negative earnings years; long-term debt not more than 5 times annual earnings; average Return on Equity over the past ten years at least 15%, average Return on Invested Capital over the last 10 years at least 12%, and earnings yield should be higher than the long term Treasury yield.
For this screen, I am using the long term treasury yield to be 4.37% (Source: Bloomberg)
This list contains some of the best stocks to buy now if you wish to construct a buy and hold portfolio of large cap companies that you can dollar cost average into.
Many of these stocks should be familiar to dividend growth investors as members of dividend aristocrats or dividend kings. For example, AOS, DOV, EXPD, PEP, etc. I own PEP in our Dividend Fortress Portfolio.
Please note that this is a screen, not a due diligence report. You should use the results of this screen to research these stocks further before you can decide to buy any of these stocks. I will do the same and if there are any stocks I want to purchase in any of our portfolios, I will post my analysis for the paid members of my Substack.
