The Fed announced a 50-basis point rate hike Wednesday, taking the borrowing rate to a targeted range of 4.25% and 4.5%, the highest level in 15 years. In addition, as per its median forecast released…
on the same day, the Federal Reserve will hike interest rates to as high as 5.1% in 2023 before the central bank ends its fight against the soaring prices.
While the market had earlier expected a stance reversal by the central bank, the Fed’s hawkish tone crushed investors’ optimism, sending stocks to sink.
Moreover, a Reuters poll of economists showed that U.S. economic growth was expected to slow to 0.3% in 2023. It also suggests a 60% chance of a U.S. recession next year.
Given this backdrop, fundamentally strong stocks PepsiCo, Inc. (PEP), Humana Inc. (HUM), and Kroger Co. (KR) might be safe investments for the long term.
PepsiCo, Inc. (PEP)
PEP is a global food and beverage giant with a broad portfolio of soft drinks. The company’s segments include Frito-Lay North America, Quaker Foods North America, and PepsiCo Beverages North America. Its product offerings also include branded dips, cheese-flavored snacks, tortillas, and dairy products.
On November 17, PEP declared a quarterly dividend of $1.15 per share payable on January 6, 2023, which reflects a 7% increase compared to a year-earlier period.
PEP’s annual dividend of $4.60 translates to a 2.55% yield. Over the last five years, PEP’s dividend payouts have grown at a 7.4% CAGR. PEP has paid consecutive quarterly cash dividends since 1965, and this year marked the company’s 50th consecutive annual dividend increase.
PEP’s net revenue increased 8.8% year-over-year to $21.97 billion for the third quarter that ended September 3, 2022. The company’s gross profit increased…
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