The S&P 500 witnessed its steepest September decline in two decades on investors’ concerns over historically high inflation, rising interest rates, and a looming recession. However…
in a recent speech in Vienna, US Federal Reserve Governor Christopher Waller dismissed recession fears and said, “The robust US labor market is giving us the flexibility to be aggressive in our fight against inflation.”
Moreover, Deputy U.S. Treasury Secretary Wally Adeyemo said that the Biden administration feels confident about the U.S. economy going forward and that bringing down inflation while maintaining growth is possible.
Given this backdrop, fundamentally sound and dividend-paying stocks The Coca-Cola Company (KO), Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) might be ideal investments for a starter stock portfolio.
The Coca-Cola Company (KO)
KO is a popular beverage company that manufactures, markets, and sells various nonalcoholic beverages worldwide. The company offers sparkling soft drinks, flavored and enhanced water, sports drinks, juice, dairy, plant-based beverages, and energy drinks.
On September 29, KO and Molson Coors Beverage Company (TAP) entered an exclusive agreement to develop and commercialize Topo Chico Spirited, a line of spirit-based, ready-to-drink cocktails inspired by the bright and refreshing taste of tequila and vodka-based beverages. Expanding to more than 20 markets across the country in 2023 might bolster the company’s revenue stream.
On July 21, KO declared a quarterly dividend of 44 cents per common share, payable to shareholders on October 3. Its annual dividend of $1.76 yields 2.90% on prevailing prices. The company’s dividend payouts have increased at a 3.1% CAGR over the past three years and a 3.6% CAGR over the past five years. The company has a record of 59 years of consecutive dividend growth.
KO’s net operating revenue increased 11.8% year-over-year to $11.33 billion in the second quarter that ended July 1. Its non-GAAP gross profit grew 7.2% from the year-ago value to $6.67 billion, while its non-GAAP net income improved 4.4% year-over-year to $3.06 billion. The company’s non-GAAP net earnings per common share increased 2.9% from its year-ago value to $0.70.
The consensus EPS estimate of $2.46 for the fiscal year ending December 2022 indicates a 6.2% improvement year-over-year. The consensus revenue estimate of $42.13 billion represents an 8.9% growth from the prior year. Additionally, KO has topped consensus EPS estimates in each of the trailing four quarters, which is impressive.
The stock has gained…
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