The Consumer Price Index came in at 9.1% for June, marking an increase from 8.6% in May. On a monthly basis, prices rose 1.3%, higher than the 1% increase seen in April. The decades-high inflation is…
weighing in on investor sentiments.
The stock market plunged on Wednesday after the inflation report came in. The Dow Jones Industrial Average slipped 0.7%, the S&P 500 dropped 0.5%, and the Nasdaq Composite slipped 0.2%.
Traders are now expecting the Federal Reserve to be more aggressive as they attached an 83% probability that the central bank will hike benchmark borrowing rates a full point at its July meeting. This increases the risk of the economy tipping into a recession.
Given this volatile backdrop, we think the fundamentally strong stocks H&R Block, Inc. (HRB), Occidental Petroleum Corporation (OXY), and Continental Resources, Inc. (CLR) might be ideal investments to survive an economic downturn. These stocks have gained substantially this year, while the S&P 500 plummeted 20.2% over the same period.
H&R Block, Inc. (HRB)
HRB offers assisted income tax return preparation and do-it-yourself (DIY) tax return preparation services and products to the general public. The company also provides Refund Transfers and the H&R Block Emerald Prepaid Mastercard.
On May 20, HRB and Nextdoor Holdings, Inc. (KIND) announced their partnership to bring community-nominated projects to life. The companies announced 11 winning projects from the submissions collected this year. Jeff Jones, president and CEO of HRB, said, “I look forward to the third year of our partnership with Nextdoor and to our next wave of community projects.”
On May 2, HRB declared a quarterly dividend of $0.27 per share, which was payable to shareholders on July 1. This reflects upon the company’s cash generation ability. Since 2016, the company has a record of returning over $2.60 billion to shareholders through dividends and share repurchases.
For the fiscal third quarter that ended March 31, HRB’s total revenues increased 3.9% year-over-year to $2.06 billion. EBITDA rose 3.5% from the prior-year quarter to $921.72 million. For the nine months ended March 31, cash, cash equivalents, and restricted cash balance improved 34.5% from the same period the prior year to $1.18 billion.
The consensus EPS estimate of $3.68 for the fiscal year 2023 indicates a 6.4% year-over-year increase. Likewise, the consensus revenue estimate for the same year of $3.50 billion reflects an improvement of 2.6% from the prior year. Moreover, HRB has an impressive surprise earnings history, as it has topped consensus EPS estimates in each of the trailing four quarters.
The stock has gained 56.9% over the past year and 57.3% year-to-date to close its last trading session at $37.07.
HRB has a Quality grade of B in our proprietary POWR Ratings system. In the 46-stock Consumer Financial Services industry, it is ranked #18. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree. Click here to see the additional POWR Ratings for HRB.
Occidental Petroleum Corporation (OXY)
OXY is an oil and gas exploration company primarily operating in the United States, the Middle East, Africa, and Latin America. The company operates through three segments: Oil and Gas; Chemical; and Midstream and Marketing.
On May 6, OXY declared a regular quarterly dividend of $0.13 per share on the common stock, payable to shareholders on July 15. This reflects upon the company’s ability to pay back its shareholders.
On May 3, EnLink Midstream Operating, LP, a subsidiary of EnLink Midstream, LLC (ENLC) and OXY subsidiary Oxy Low Carbon Ventures, LLC (OLCV), announced that they had signed a letter of intent for a Transportation Services Agreement (TSA), under which EnLink is expected to provide OCLV with CO2 transportation services along the Mississippi River corridor.
Richard Jackson, President, U.S. Onshore Resources and Carbon Management, Operations, Oxy, said, “This collaboration aligns with our strategy to accelerate the path to net zero not only for ourselves but for other organizations along the Mississippi River corridor looking to do the same.”
For the fiscal first quarter of 2022, OXY’s total revenues and other income increased 55.7% year-over-year to $8.53 billion. Adjusted income attributable to common stockholders and adjusted EPS came in at $2.13 billion and…
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