The U.S. market is under tremendous pressure due to soaring consumer prices, aggressive rate hikes, and rising recession fears. Amid such macroeconomic uncertainties, the fiscal third-quarter financial report came in lower than expected. Moreover…
analysts are also projecting a decline in the U.S. fourth-quarter earnings for the first time in two years. This is weighing further on the stock market.
However, on the positive side, Goldman Sachs expects a significant decline in inflation next year as prices and wage growth slow down. The bank expects core personal consumption expenditure (PCE) to fall to 2.9% by December 2023 from the current 5.1% level. PCE is the Federal Reserve’s preferred measure of inflation. In addition, the Fed’s policy meeting held earlier this month also suggested a slower pace of interest rate hikes in the future.
Amid this backdrop, investors could consider buying and holding quality stocks AbbVie Inc. (ABBV), CSX Corporation (CSX), Waste Management, Inc. (WM), Stellantis N.V. (STLA), and Molina Healthcare, Inc. (MOH).
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 November 23, ABBV announced that the European Commission (EC) approved SKYRIZI as the first specific interleukin-23 (IL-23) inhibitor for treating adults with moderately to severely active Crohn’s disease who have had inadequate or lost response to conventional or biologic therapy. This marks a significant milestone in the company’s pursuit to expand its IBD portfolio.
In the same month, ABBV announced that Health Canada approved UBRELVY® (ubrogepant tablet) for acutely treating migraine, with or without aura, in adults.
“UBRELVY® as the first oral repent approved in Canada for the acute treatment of migraine is an important milestone in our commitment to bring innovative new medicines to Canadians with the goal to make a meaningful difference for patients,” said Tracey Ramsay, Vice President, and General Manager of ABBV.
On September 9, ABBV declared a quarterly dividend of $1.41 per common share, payable to shareholders on November 15. ABBV pays a $5.92 per share dividend annually, which translates to a 3.71% yield on the current price. Its dividend payouts have grown at a CAGR of 9.6% over the past three years and 17.3% over the past five years. The company has nine years of consecutive dividend growth.
ABBV’s net revenues increased 3.3% year-over-year to $14.81 billion in the third quarter ended September 30, 2022. The company’s operating income increased 6.9% year-over-year to $4.60 billion. Its adjusted after-tax earnings increased 29.1% year-over-year to $6.53 billion, while its adjusted EPS rose 29.3% year-over-year to $3.66.
Street EPS estimate of $3.67 for the fourth fiscal quarter ending December 2022 reflects a rise of 10.8% year-over-year. Likewise, its revenue estimate of $15.35 billion for the same quarter indicates an improvement of 3.1% from the prior-year quarter. Additionally, ABBV has topped consensus EPS estimates in each of the trailing four quarters.
ABBV’s stock has gained 34.5% over the past year, closing its last trading session at $159.62. It has gained 17.9% year-to-date.
ABBV’s POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
ABBV also has an A grade for Quality and a B grade for Growth and Value. It is ranked #4 out of 162 stocks in the Medical – Pharmaceuticals industry.
To see the additional POWR Ratings for ABBV for Momentum, Stability, and Sentiment, click here.
CSX Corporation (CSX)
CSX provides rail-based freight transportation services. The company offers rail services; and transportation of intermodal containers and trailers through a network of approximately 30 terminals, as well as other transportation services, such as rail-to-truck transfers and bulk commodity operations.
CSX’s $0.40 annual dividend yields 1.25% at its current share price. The company declared…
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