Share price declines of more than 25% can spell trouble. But for large caps with economic moats, declines can indicate bargains and future winners. Consider this diversified list of companies today for double-digit gains potential. They are excellent candidates for above-average returns to complement quality blue chips, which are expensive and slower growth.
Attractive Healthcare dividend stock
Bristol-Myers Squibb Company (NYSE:BMY) has focused on and has a leading position in immuno-oncology. It can have huge pullbacks based on clinical data releases, as was the case with the recent example of Opdivo, its cancer drug. As a result, the company’s share price is about 34% below its July-high.
At about $50 per share, Bristol-Myers trades at a P/E of 20. This is a more reasonable valuation compared to its previous P/E, north of 30 for the 17-18.3% per year earnings growth estimate for the next few years. For this year, Bristol-Myers expects EPS growth of 20-26%. Moreover, the company now yields 3%.
Morningstar currently rates Bristol-Myers 4 stars for being undervalued. Bristol-Myers is rated a wide-moat company by Morningstar, has an S&P credit rating of A+ and a debt/cap of 30%.
Compelling discount retail stock
Dollar General Corporation (NYSE:DG) is about 28% lower from its July high. It’s a narrow-moat company, has an investment-grade S&P credit rating of BBB and a debt/cap of 30%. It offers a growing dividend with a starting yield of 1.4% and a sustainable payout ratio of 22%.
Dollar General trades at a P/E of 15.9 and the company guides to grow its diluted earnings per share by 10-15% this year and in the foreseeable future.
To find out the third attractive stock, read the full article on Seeking Alpha here: 3 Large Caps Priced At A Bargain
If you like what you've just read, consider subscribing via the "Subscribe Here" form at the top right so that you will receive an email notification when I publish a new article.Disclosure: At the time of writing, I own shares in BMY and DG.
Disclaimer: I am not a certified financial advisor. This article is for educational purposes, so consult a financial advisor and or tax professional if necessary before making any investment decisions.
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