Investor shares success story of buying Eaton Plc in 2015 and benefiting from a 530% stock increase, outperforming the S&P 500. Crediting Warren Buffett’s strategy for the win, investor highlights Eaton’s growth but expresses concern over the historically low yield affecting current investment decision.

Buffett’s investment approach involves buying undervalued companies and holding long-term. Investor found Eaton with high dividend yield post-acquisition, shifting focus to electrical products, boosting profitability. However, stock’s P/E ratio has doubled, indicating a potential overvaluation compared to historical metrics.

Despite Eaton’s current stock decline, investor cautions against buying due to low dividend yield and stretched valuation. Growth investors may differ, but stock’s history of deep drawdowns suggests waiting for a more attractive entry point. Motley Fool’s top 10 stocks exclude Eaton, emphasizing potential for higher returns elsewhere.

Motley Fool analyst holds Eaton stock position, highlighting the company’s current valuation challenges. Disclosure policy in place. Considering Eaton’s high valuation metrics, including P/E ratio and low dividend yield, investors are advised to wait for a more favorable buying opportunity.

Read more at Yahoo Finance: Is Eaton Stock a Buy Now?