{"id":7721,"date":"2025-04-22T17:29:56","date_gmt":"2025-04-22T21:29:56","guid":{"rendered":"https:\/\/sharewatch.com\/wp\/2025\/04\/22\/three-swan-stocks-trading-on-the-cheap\/"},"modified":"2025-04-22T17:29:56","modified_gmt":"2025-04-22T21:29:56","slug":"three-swan-stocks-trading-on-the-cheap","status":"publish","type":"post","link":"https:\/\/sharewatch.com\/wp\/2025\/04\/22\/three-swan-stocks-trading-on-the-cheap\/","title":{"rendered":"Three SWAN Stocks Trading on the Cheap"},"content":{"rendered":"
\n
\n

Treasury Secretary Scott Bessent sat down with Yahoo Finance the other day to make one thing clear.<\/p>\n

He\u2019s not worried.<\/p>\n

Not about tariffs. Or the economy. Or the stock market.<\/p>\n

He\u2019s confident it will all work out, pointing out how:<\/p>\n

\n

\u2026 tariffs are getting the majority of publicity now, but we are having very good luck \u2013 or very, very good progress. It\u2019s not luck because it\u2019s been a lot of hard work \u2013 on the tax bill. So the tax bill is moving through the Senate, moving through the House. I think we\u2019re going to have some permanence for the 2017 Tax Cuts and Job Acts probably by 4th of July. And I think that will give people certainty.<\/p>\n<\/blockquote>\n

And, of course, it\u2019s certainty that Mr. Market likes the most.<\/p>\n

As for tariffs, the topic du jour:<\/em><\/p>\n

\n

There are 15 large trading partners. We set aside China. There are 14, and we\u2019re in rapid motion and setting up a process for the 14 largest trading partners, most of whom have very large deficits. So, in 90 days, are we going to have\u2026 a formal legal document done and dusted? Not likely.<\/p>\n

But I think if we follow the process, we could have substantial clarity on those 14 away from China in terms of agreements in principle.<\/p>\n<\/blockquote>\n

So even more certainty is coming!<\/p>\n

Probably.<\/p>\n

In the next three or four or maybe five months.<\/p>\n

With all due respect to Bessent, the markets were not appeased yesterday. In fact, they seemed to completely ignore him, focusing instead on Federal Reserve Chair Jerome Powell\u2019s cautionary remarks.<\/p>\n

It seems he wants to \u201cwait for further clarity\u201d before making an interest rate decision.<\/p>\n

Fortunately, we don\u2019t have to sit around and bite our nails in the meantime. Not when there\u2019s a sleep-well-at-night policy that gets me through this kind of market drama every time.<\/p>\n

The SWAN Way of Selecting Stocks<\/strong>
I\u2019ve adopted \u201cSWAN,\u201d which stands for sleep well at night,\u201d as my baseline investment philosophy and the bedrock for our investment strategies at Wide Moat Research.<\/p>\n

SWAN stocks, for those who don\u2019t know, are dividend-paying companies of a certain caliber. They\u2019re low-risk, high-quality businesses that don\u2019t get overexcited during bull runs or overly discouraged during bear markets.<\/p>\n

They\u2019re always focused on safety-based growth, which means they work hard to be prepared for whatever may come.<\/p>\n

When the economic sun shines, they use their defensive, \u201cwide moat\u201d advantages to generate earnings and dividend growth for stakeholders. And when the clouds come out and the rain begins to fall, they fend off the competition by maintaining disciplined risk management skills to maintain and even grow market share.<\/p>\n

After all, it\u2019s often during the worst times when the best bargains are revealed.<\/p>\n

This conservative approach enables SWAN stocks to treat their shareholders phenomenally. Not only do they pay their dividends on time, but they regularly raise them during good times and bad times alike.<\/p>\n

I cover SWAN stocks in The Intelligent REIT Investor Guide<\/em>, though there I call them \u201cblue-chip\u201d investments, writing how:<\/p>\n

\n

They rarely provide the highest dividend yields or even necessarily the best total returns. And they\u2019re not usually the type to trade at bargain prices. However, they are the type that provides years of 7%-8% total returns on average, with only modest risk. You see, blue-chip [companies] have certain qualities that set them apart.<\/p>\n<\/blockquote>\n

This includes outstanding proven management that knows its business inside and out, as well as:<\/p>\n

    \n
  • \u201cA track record of effective deployment of available capital to create shareholder value,<\/li>\n
  • Balance sheet strength and flexibility,<\/li>\n
  • Sector focus and deep regional or local market expertise,<\/li>\n
  • Conservative and intelligent dividend policy,<\/li>\n
  • Good corporate governance,<\/li>\n
  • Meaningful insider stock ownership.\u201d<\/li>\n<\/ul>\n

    While a blue-chip, or SWAN, stock might not tick off every single one of those boxes\u2026 it will cover most. And that gives you, the investor, the confidence you need to shrug off short-term volatility and focus on the bigger picture.<\/p>\n

    This is especially true when you can buy them on the cheap during downturns like the one we\u2019re seeing now. It\u2019s all about risk evaluation, which involves knowing about an investment\u2019s \u201cmargin of safety.\u201d<\/p>\n

    Columbia University finance professor Joel Greenblatt framed margin of safety in a 2011 Barron\u2019s<\/em> interview, saying, \u201cIt\u2019s about figuring out what something is worth and then paying a lot less for it.\u201d<\/p>\n

    SWAN stock share prices almost always go up again. And they pay you dividends all the while you wait.<\/p>\n

    Three SWANs Trading on the Cheap<\/strong>
    One definite devalued SWAN stock is PepsiCo (PEP).<\/strong> Its shares began suffering after anti-obesity drugs took center stage. And Robert Kennedy Jr. leading the Department of Health and Human Services has jittered investors further still.<\/p>\n

    Yet PepsiCo keeps expanding anyway, posting positive annual earnings per share (\u201cEPS\u201d) growth in 16 of the last 20 years. Better yet, it maintains an A+ credit rating, has strong cash flows, and boasts management that knows how to read consumer preferences.<\/p>\n

    Shares are trading at just $142 per share at last check \u2013 far from their 2023 high near $200. That means their price-to-earnings (P\/E) ratio is just 17.5 times. Compare that with their:<\/p>\n

      \n
    • Five-year average of 25.1 times<\/li>\n
    • 10-year average of 23 times<\/li>\n
    • 20-year average of 20.9 times<\/li>\n<\/ul>\n

      PepsiCo is currently yielding 3.79%\u2026 has increased its annual dividend for 52 consecutive years\u2026 and has already announced a 5% uptick to that payout for 2025.<\/p>\n

      Johnson & Johnson (JNJ)<\/strong> is another long-term player with an even more impressive track record. Yes, tariffs have spooked investors, sending shares down 10% from their 52-week high. But this company is about as SWAN-ish as you can get.<\/p>\n

      It has boasted positive annual EPS growth in 18 of the last 20 years. And it\u2019s one of only two companies the world over with an AAA credit rating from S&P Global.<\/p>\n

      Nonetheless, the current tariff panic has pushed JNJ\u2019s P\/E ratio down to roughly 15 times compared with its:<\/p>\n

        \n
      • Five-year average of 16.9 times<\/li>\n
      • 10-year average of 17.1 times<\/li>\n
      • 20-year average of 16.3 times<\/li>\n<\/ul>\n

        It\u2019s currently yielding 3.23%\u2026 has increased its dividend for 62 years in a row\u2026 and paid out 4.8% more this month than it did back in January.<\/p>\n

        A third SWAN to consider is Caterpillar (CAT)<\/strong>. It is a cyclical stock, unlike PepsiCo and JNJ; so when the global economy slows down, demand for its construction equipment does fall.<\/p>\n

        Just not for long. CAT shares have always bounced right back \u2013 and then some \u2013 from recessionary periods, making any dip (like the one we\u2019re seeing now) a potential buying opportunity.<\/p>\n

        That\u2019s particularly true considering how the S&P 500\u2019s total return compound annual growth rate over the past 20 years is 9.6%\u2026 whereas CAT\u2019s is 12.03%.<\/p>\n

        This global king is only yielding 1.92% right now. But it has increased its annual dividend for 31 consecutive years, including the most recent 8.5% raise.<\/p>\n

        Plus, CAT carries an A-rated balance sheet, one of the key hallmarks of a true SWAN. And that makes it \u2013 like PepsiCo and Johnson & Johnson \u2013 hard to beat.<\/p>\n

        Regards,<\/p>\n

        Brad Thomas<\/p>\n

        #1 Energy ETF for Monthly Payouts<\/strong> [sponsor]
        For every $100 invested, you could collect up to $22 in dividends. But you must act by Wednesday, November 20th, to secure the next payment. Go here to find out more. <\/p>\n

        Source: Wide Moat Research<\/p>\n<\/p><\/div>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

        Treasury Secretary Scott Bessent sat down with Yahoo Finance the other day to make one thing clear. He\u2019s not worried. Not about tariffs. Or the economy. Or the stock market. He\u2019s confident it will all work out, pointing out how: \u2026 tariffs are getting the majority of publicity now, but we are having very good […]<\/p>\n","protected":false},"author":1,"featured_media":7722,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ocean_post_layout":"","ocean_both_sidebars_style":"","ocean_both_sidebars_content_width":0,"ocean_both_sidebars_sidebars_width":0,"ocean_sidebar":"","ocean_second_sidebar":"","ocean_disable_margins":"enable","ocean_add_body_class":"","ocean_shortcode_before_top_bar":"","ocean_shortcode_after_top_bar":"","ocean_shortcode_before_header":"","ocean_shortcode_after_header":"","ocean_has_shortcode":"","ocean_shortcode_after_title":"","ocean_shortcode_before_footer_widgets":"","ocean_shortcode_after_footer_widgets":"","ocean_shortcode_before_footer_bottom":"","ocean_shortcode_after_footer_bottom":"","ocean_display_top_bar":"default","ocean_display_header":"default","ocean_header_style":"","ocean_center_header_left_menu":"","ocean_custom_header_template":"","ocean_custom_logo":0,"ocean_custom_retina_logo":0,"ocean_custom_logo_max_width":0,"ocean_custom_logo_tablet_max_width":0,"ocean_custom_logo_mobile_max_width":0,"ocean_custom_logo_max_height":0,"ocean_custom_logo_tablet_max_height":0,"ocean_custom_logo_mobile_max_height":0,"ocean_header_custom_menu":"","ocean_menu_typo_font_family":"","ocean_menu_typo_font_subset":"","ocean_menu_typo_font_size":0,"ocean_menu_typo_font_size_tablet":0,"ocean_menu_typo_font_size_mobile":0,"ocean_menu_typo_font_size_unit":"px","ocean_menu_typo_font_weight":"","ocean_menu_typo_font_weight_tablet":"","ocean_menu_typo_font_weight_mobile":"","ocean_menu_typo_transform":"","ocean_menu_typo_transform_tablet":"","ocean_menu_typo_transform_mobile":"","ocean_menu_typo_line_height":0,"ocean_menu_typo_line_height_tablet":0,"ocean_menu_typo_line_height_mobile":0,"ocean_menu_typo_line_height_unit":"","ocean_menu_typo_spacing":0,"ocean_menu_typo_spacing_tablet":0,"ocean_menu_typo_spacing_mobile":0,"ocean_menu_typo_spacing_unit":"","ocean_menu_link_color":"","ocean_menu_link_color_hover":"","ocean_menu_link_color_active":"","ocean_menu_link_background":"","ocean_menu_link_hover_background":"","ocean_menu_link_active_background":"","ocean_menu_social_links_bg":"","ocean_menu_social_hover_links_bg":"","ocean_menu_social_links_color":"","ocean_menu_social_hover_links_color":"","ocean_disable_title":"default","ocean_disable_heading":"default","ocean_post_title":"","ocean_post_subheading":"","ocean_post_title_style":"","ocean_post_title_background_color":"","ocean_post_title_background":0,"ocean_post_title_bg_image_position":"","ocean_post_title_bg_image_attachment":"","ocean_post_title_bg_image_repeat":"","ocean_post_title_bg_image_size":"","ocean_post_title_height":0,"ocean_post_title_bg_overlay":0.5,"ocean_post_title_bg_overlay_color":"","ocean_disable_breadcrumbs":"default","ocean_breadcrumbs_color":"","ocean_breadcrumbs_separator_color":"","ocean_breadcrumbs_links_color":"","ocean_breadcrumbs_links_hover_color":"","ocean_display_footer_widgets":"default","ocean_display_footer_bottom":"default","ocean_custom_footer_template":"","ocean_post_oembed":"","ocean_post_self_hosted_media":"","ocean_post_video_embed":"","ocean_link_format":"","ocean_link_format_target":"self","ocean_quote_format":"","ocean_quote_format_link":"post","ocean_gallery_link_images":"on","ocean_gallery_id":[],"footnotes":""},"categories":[29],"tags":[],"class_list":["post-7721","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-dividends","entry","has-media"],"_links":{"self":[{"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/posts\/7721","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/comments?post=7721"}],"version-history":[{"count":0,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/posts\/7721\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/media\/7722"}],"wp:attachment":[{"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/media?parent=7721"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/categories?post=7721"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/tags?post=7721"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}