4 Stocks You Can Rely on in Any Market Conditions
February 10, 2023 at 04:06 AM EST
Rising bond yields and a strong dollar are dampening the stock market rally. Also, experts see a significant chance of inflation rebounding. Therefore, fundamentally strong stocks, Cigna (CI), McKesson (MCK), Pilgrim’s Pride (PPC), and Global Partners (GLP), which can potentially withstand any market conditions, could be ideal investments now. Read on...
US stocks fell in the last trading session as bond yields rose to their highest level in months on expectations that the Federal Reserve will keep rates higher for longer. Moreover, the market rally could be nearing an end, given the dollar is showing signs of a recovery from its recent four-month slump.
Jonathan Krinsky, managing director and chief market technician at stock brokerage BTIG, said, “You need to see a weaker dollar to continue this equity rally, and if there’s not a lot of downsides for the dollar, it’s tough to see a lot of upsides for equities.”
Moreover, Federal Reserve Governor Christopher Waller recently talked tough on inflation, warning that the fight is not over and could result in higher interest rates than markets anticipate.
In addition, while the cooling inflation has boosted investors’ sentiments this year, top economist Mohamed El-Erian recently warned that inflation has a 75% chance of rebounding or remaining elevated, and the Fed could end up crushing the economy as it struggles to rein in soaring prices.
Amidst the rising unrest in the stock market, fundamentally solid stocks Cigna Corporation (CI), McKesson Corporation (MCK), Pilgrim’s Pride Corporation (PPC), and Global Partners LP (GLP), which have the potential to withstand any market conditions, could be worth buying now.
Cigna Corporation (CI)
CI provides insurance and related products and services in the United States. It sells its offerings through insurance brokers and consultants. The company operates through the Evernorth and Cigna Healthcare segments.
In terms of forward Price/Sales, CI is trading at 0.47x, which is 89.7% lower than the industry average of 4.60x. Its forward EV/EBITDA multiple of 9.92 is 27.1% lower than the 13.60 industry average.
On February 2, 2023, CI declared a 10% increase in the quarterly cash dividend to $1.23 per share to be paid on March 23, 2023.
CI pays a $4.92 per share dividend annually that yields 1.69% on the current market price. Its four-year average dividend yield is 0.65%. Its dividend payouts have grown at a CAGR of 382% over the past three years.
CI’s adjusted revenues rose marginally year-over-year to $45.74 billion during the fourth quarter that ended December 31, 2022. Shareholders’ net income increased 4.7% year-over-year to $1.17 billion, and shareholders’ net income per share grew 13% year-over-year to $3.83.
The consensus EPS estimate of $24.75 for the fiscal year 2023 indicates a 6.4% year-over-year improvement. The consensus revenue estimate of $188.65 billion for the current year reflects a 4.4% rise from the prior year. CI has an impressive earnings surprise history, as it has surpassed the consensus EPS estimates in each of the trailing four quarters.
Shares of CI have gained 25.5% over the past year to close the last trading session at $291.51.
CI’s POWR Ratings reflect its promising outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
CI has a B grade for Value, Stability, and Quality. Within the A-rated Medical – Health Insurance industry, it is ranked #6 out of 11 stocks.
In addition to the POWR Ratings I’ve just highlighted, you can access CI’s ratings for Growth, Momentum, and Sentiment here.
McKesson Corporation (MCK)
MCK is a diversified healthcare service provider operating globally. The company operates through its four segments: U.S. Pharmaceutical; Prescription Technology Solutions (RxTS); Medical-Surgical Solutions; and International.
MCK’s forward EV/Sales of 0.20x is 95.1% lower than the industry average of 4.09x. Furthermore, the stock’s forward Price/Sales multiple of 0.18 is 96.1% lower than the 4.60 industry average.
On January 26, MCK declared a regular dividend of 54 cents per share of common stock, payable on April 3, 2023.
While MCK’s four-year average dividend yield is 0.91%, its annual dividend of $2.16 yields 0.60% on prevailing prices. The company’s dividend payouts have increased at CAGRs of 8.1% and 10.3% over the past three and five years. The company has raised its dividends for 15 consecutive years.
During the fiscal 2023 third quarter that ended December 31, 2022, MCK’s total revenues increased 2.7% year-over-year to $70.49 billion. Its adjusted earnings came in at $972 million and $6.90 per share, up 3% and 12.2% year-over-year, respectively.
Analysts expect MCK’s revenue to increase 3% year-over-year to $68.08 billion for the current quarter ending March 2023. Its EPS for the same quarter is expected to grow 21.9% year-over-year to $7.11. Moreover, the company has surpassed the consensus revenue estimates in three of the trailing four quarters, which is impressive.
The stock has gained 30% over the past year to close its last trading session at $362.36.
MCK’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which translates to a Strong Buy in our POWR Ratings system.
MCK is also rated an A for Growth and Value and a B for Stability and Quality. In the 80-stock Medical – Services industry, it is ranked first. Click here to see the additional POWR Ratings for MCK (Momentum and Sentiment).
Pilgrim’s Pride Corporation (PPC)
PPC engages in producing, processing, marketing, and distributing fresh, frozen, and value-added chicken and pork products to retailers, distributors, and food service operators worldwide.
In terms of forward Price/Sales, PPC is trading at 0.36x, which is 69.9% lower than the industry average of 1.19x. Its forward EV/Sales multiple of 0.54 is 68.8% lower than the 1.74 industry average.
During the fiscal year that ended December 25, 2022, PPC’s net sales increased 18.2% from the prior year to $17.47 billion. The company’s operating income rose 457.2% year-over-year to $1.18 billion, while adjusted EBITDA grew 27.9% year-over-year to $1.75 billion.
Street expects PPC’s EPS to increase 53.3% year-over-year to $2.59 for the fiscal year ending December 2024. Its revenue for the same year is expected to grow 1.2% year-over-year to $16.79 billion. Moreover, the company has surpassed the consensus EPS and revenue estimates in three of the trailing four quarters.
The stock has gained 6.2% year-to-date to close the last trading session at $25.21.
PPC’s solid prospects are reflected in its POWR Ratings. The company has an overall rating of B, which equates to a Buy in our proprietary rating system. In addition, it has a B grade for Growth, Value, Stability, and Quality. It is ranked #8 among 81 stocks in the B-rated Food Makers industry.
Beyond what we stated above, we also gave PPC grades for Momentum and Sentiment. Get all PPC ratings here.
Global Partners LP (GLP)
GLP purchases, stores, and transports gasoline and gasoline blendstocks, distillates, residual oil, renewable fuels, crude oil, and propane to wholesalers and retailers in New England, the Mid-Atlantic, and New York. Its segments include Wholesale; Gasoline Distribution and Station Operations; and Commercial.
GLP’s forward P/E of 3.64x is 55.3% lower than the industry average of 8.15x. The stock’s forward Price/Sales multiple of 0.06 is 95.1% lower than the 1.30 industry average.
GLP pays a $2.54 per share dividend annually, which translates to a 7.06% yield on the current price level. The company’s four-year average dividend yield is 11.06%, and it has raised its dividend payout at a CAGR of 5.9% over the past three years.
GLP’s sales increased 39.2% year-over-year to $4.63 billion in the fiscal third quarter that ended September 30, 2022. Its gross profit rose 61.7% year-over-year to $328.38 million. Adjusted EBITDA grew 112.8% year-over-year to $168.51 million, while its EPS increased 262.8% from the prior-year quarter to $3.12.
Analysts expect the company’s EPS and revenue to amount to $1.40 and $4.51 billion in the fourth quarter that ended December 2022, indicating a 218.2% and 10.2% year-over-year growth, respectively. GLP has surpassed the consensus EPS and revenue estimates in all four trailing quarters.
The stock has gained 48.5% over the past nine months to close the last trading session at $36.00.
It is no surprise that GLP has an overall rating of A, equating to a Strong Buy in our proprietary rating system. GLP also has an A grade for Value and Momentum and a B for Growth and Sentiment. It tops 31-stock A-rated MLPs – Oil & Gas industry.
To access additional GLP ratings for Stability and Quality, click here.
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CI shares were unchanged in premarket trading Friday. Year-to-date, CI has declined -12.02%, versus a 5.98% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.4 Stocks You Can Rely on in Any Market Conditions appeared first on StockNews.com