The latest GDP estimate showed that the U.S. economy was in contraction for the first half of this year, indicating a weaker economy as a direct consequence of the Federal Reserve’s series of…
interest rate hikes to cool off inflation and slow demand.
Moreover, the Federal Reserve is expected to launch another outsized rate hike in November. In an open letter to the central bank, Cathie Wood, founder of Ark Investment, said that the Fed is likely making a mistake in its hardline stance against inflation.
Though President Joe Biden said, “Our economy is strong as hell,” nearly every CEO expects a recession to hit America soon. Roger W. Ferguson Jr, vice chairman of the Business Council, said, “CEOs are now preparing for near-inevitable recessions in both the U.S. and Europe.”
In light of such recessionary concerns, we think fundamentally strong stocks Walmart Inc. (WMT), AbbVie Inc. (ABBV), The Coca-Cola Company (KO), and International Paper Company (IP), which have a history of consistent dividend payouts, could help you navigate a potential bear market.
Walmart Inc. (WMT)
WMT engages in the operation of retail, wholesale, and other units worldwide. The company operates through three segments: Walmart U.S.; Walmart International; and Sam’s Club.
On October 3, WMT’s division Sam’s Club launched its expanded Photo and Customization Services, where its members are granted access to professional photographers, enhanced photo printing services, as well as made-to-order apparel and home goods, making Sam’s Club the first to do so in this space.
On September 28, WMT celebrated the grand opening of Walmart’s first of four Next Generation Fulfillment Centers in Joliet, Illinois. The new FC should improve the operative capability of the company.
In February, WMT declared an annual dividend of $2.24 per share to be paid in four quarterly installments of $0.56 per share. Its annual dividend of $2.24 yields 1.72% on prevailing prices. The company’s dividend payouts have increased at a 1.9% CAGR over the past three and five years. The company has a record of 48 years of consecutive dividend growth.
WMT’s total revenues increased 8.4% year-over-year to $152.86 billion for the second quarter that ended July 31, 2022. Its consolidated net income rose 17.9% year-over-year to $5.15 billion, while its EPS grew 23.7% year-over-year to $1.88.
The consensus EPS estimate of $1.48 for the fiscal fourth quarter ending April 2023 represents a 14.1% improvement year-over-year. The consensus revenue estimate of $144.64 billion for the same quarter indicates a 3.1% increase from the prior-year period. The company has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in three of the trailing four quarters.
Its stock gained marginally intraday to close the last trading session at $131.37.
WMT’s POWR Ratings reflect this promising outlook. The company has an overall A rating, which translates to Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has an A grade for Sentiment and a B for Growth, Stability, and Quality. In the A-rated Grocery/Big Box Retailers industry, WMT is ranked #8 out of 38 stocks. To see the additional POWR ratings for WMT for Value and Momentum, click here.
AbbVie Inc. (ABBV)
ABBV is a healthcare company that discovers, develops, manufactures, and sells pharmaceuticals worldwide with a focus and capabilities to address health challenges.
On September 19, ABBV announced the…
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