Billionaire investor Warren Buffett has seen downturns, recessions, market crashes, and all sorts of adversity in the markets over the years. Investors who are worried about the markets today should heed the Oracle of Omaha's advice and simply bet on America. Even during the early stages of the pandemic, Buffett stated that "nothing can basically stop America." And true enough, many American companies have persevered through the pandemic and continue to be great buys today.
Three U.S.-based stocks that investors can buy to bet on America are Seagen (SGEN), T-Mobile US (TMUS -0.27%), and Coca-Cola (KO -0.65%). These business can diversify your portfolio and make for solid long-term investments.
Washington state-based Seagen may not be a typical Buffett stock because biotech isn't an area he normally has exposure to in his portfolio. But Seagen's pursuit of cancer-fighting drugs and its ability to bring multiple products to market are reasons this would be a solid healthcare stock to rally behind. Its success means cancer patients have better treatments available.
Seagen isn't a profitable business, incurring losses of $740 million over the trailing 12 months. But the reason the stock deserves an exception for value-oriented investors is that Seagen's gross profit margin is an impressive 80% of revenue. As the company scales its operations, there's a path for Seagen to get to profitability.
Through the first half of the year, Seagen generated $814.8 million in product sales (up 25% year over year), led by lymphoma drug Adcetris, which brought in $382.9 million. The company has over 17 product pipelines that it is advancing this year that could fuel more growth for the business in the years ahead.
Seagen is an excellent example of an American company that is innovating and that could be much bigger in the years ahead.
2. T-Mobile US
T-Mobile is a top telecom company that is also based out of Washington. While it doesn't provide a dividend like other telecom stocks, it is buying back shares, which can help result in a higher stock price and lead to gains for shareholders. This month, it announced a share repurchase program that could see it buying back up to $14 billion in shares within a year. And that will likely be just the start, as the company previously said it planned to buy back up to $60 billion in stock between 2023 and 2025.
The company says its 5G network now covers nearly the entire country, offering more coverage than its rivals, AT&T and Verizon Communications, combined. T-Mobile is coming off its best second-quarter results ever, reporting record numbers for postpaid net account additions (380,000) and postpaid net customer additions (1.7 million) for the period ending June 30.
Although T-Mobile incurred a net loss in Q2, that has been largely due to merger-related expenses; it merged with Sprint in 2020 and it is currently working on decommissioning Sprint's network. With at least $5.4 billion in synergies that will be gained from the merger this year, T-Mobile's business will be leaner and more profitable in the future, and investing in the stock today could be a great move for long-term investors.
Soft drink giant Coca-Cola is a favorite of Buffett's and it's easy to see why. The Georgia-based business has grown over the years and adapted to changing consumer tastes. It now has 200 brands worldwide, which include coffee, plant-based juices, water, and flavored alcohol beverages, in addition to soft drinks.
The company is a good, safe option to invest in because its products are staples in homes and will be in demand regardless of how the economy is doing. Despite challenging macroeconomic conditions, including supply chain issues and rising inflation, the company delivered solid second-quarter results in July, in which sales of $11.3 billion rose 12% year over year.
Coca-Cola is a cash-rich business that has generated $10.2 billion in free cash flow over the trailing 12 months, which is more than enough to cover its dividend payments of $7.4 billion during that time frame. Its 3% yield is higher than the S&P 500 average of 1.7% and can be an excellent source of recurring income over the long haul as this Dividend King has raised its payouts for 60 consecutive years.
Whether you buy Coca-Cola stock for its dividend or its financial strength and resiliency, this is an investment you can buy and forget about for a long while.