The September inflation report came in higher than expected, increasing the likelihood of aggressive rate hikes later this year. As analysts expect the economy to plunge into recession next year, dividend-paying stocks Walmart (WMT), Coca-Cola (KO) and Greif (GEF), which are backed by solid fundamentals, can help you plan for retirement. even in a bear market. Read more….
The Federal Reserve has implemented a series of rate hikes in an effort to contain rising inflation. Despite interest rate hikes, inflation came in higher than expected in September, moving up 0.4% and 8.2% year-on-year. The report initially shocked the financial markets, with stock futures plummeting and government bond yields rising.
The latest GDP estimate showed that the US economy shrunk in the first half of this year. JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon warned of the: chance of a recessionas continued and high inflation could push interest rates above 4.5%.
The S&P 500 is down more than 20% this year, indicating a bear market. However, there maybe there are still chances left for long-term investors, as bear markets usually don’t last long.
Walmart Inc. (WMT)
WMT is engaged in the operation of retail, wholesale and other units around the world. The company operates through three segments: Walmart US; 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 gain access to professional photographers, enhanced photo printing services, as well as custom clothing and homewares, making Sam’s Club the first to do so in the warehouse 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 company’s operational capacity and could boost revenues.
In February, WMT announced an annual dividend of $2.24 per share, payable in four quarterly installments of $0.56 per share. The annual dividend yield is 1.69% over prevailing prices. The company’s dividend payments have increased at a CAGR of 1.9% over the past three and five years. The company has a record 48 years of consecutive dividend growth.
WMT’s total revenues totaled $152.86 billion for the second quarter ended July 31, 2022, up 8.4% year-over-year. Consolidated net income was $5.15 billion, up 17.9% year over year, while EPS was $1.88, up 23.7% year over year.
The consensus EPS estimate of $1.48 for the fiscal fourth quarter ended April 2023 represents a 14.1% year-over-year improvement. The consensus revenue estimate of $144.64 billion for the same quarter points to a 3.1% increase from the same period last year. The company has a distinguished history of earnings surprises, surpassing consensus EPS estimates in three of its lagging four quarters.
Over the past three months, the stock is up 5.5% to close its last trading session at $132.28.
WMTs POWR ratings reflect these promising prospects. The company’s overall A rating translates to Strong Buy in our proprietary rating system. The POWR Ratings rate stocks on 118 different factors, each with its own weighting.
It has an A rating for Sentiment and a B for Growth, Stability and Quality. It ranks 6 out of 38 stocks in the A rating Grocery/Big Box Retailers industry.
To see the additional POWR ratings for WMT for value and momentum, click here.
The Coca Cola Company (KO)
Beverage company KO produces, sells and sells various non-alcoholic drinks worldwide. The company provides sparkling soft drinks, flavored and enhanced water, sports drinks, juice, dairy and plant-based drinks, tea and coffee, and energy drinks.
On September 29, KO and Molson Coors Beverage Company (TICK) announced that they had entered into an exclusive agreement to develop and commercialize Topo Chico Spirited, a line of alcohol-based, ready-to-drink cocktails. The launch of a new product can boost the company’s revenue stream.
On July 21, KO announced a quarterly dividend of 44 cents per common share, to be paid to shareholders on October 3. The $1.76 annual dividend yields 3.15% over prevailing prices. The company’s dividend payments are up 3.1% CAGR over the past three years and at 3.6% CAGR over the past five years. The company has a record 59 years of consecutive dividend growth.
KO net operating income increased 11.8% year over year to $11.33 billion in the second quarter ended July 1. gross profit grew 7.2% from a year ago to $6.67 billion, while non-GAAP net income improved 4.4% year-over-year to $3.06 billion. The company’s non-GAAP net earnings per common share were up 2.9% from a year ago to $0.70.
Street expects KO revenue to grow 8.9% year-over-year to $42.09 billion in fiscal 2022. Earnings per share are estimated to grow 5.9% year-over-year to $2.46 in the same year. year. It has beaten EPS estimates in all four of the last four quarters, which is impressive.
Shares of KO are up 2.5% in the past five days to close out the last trading session at $55.87.
KO’s overall B rating corresponds to a Buy in our proprietary rating system. The stock has a B-score for stability, sentiment and quality. It ranks number 17 out of 35 stocks in the A rating Drinks industry.
Click here to get the KO scores for growth, value and momentum.
Greif, Inc. (GEF)
GEF is a global manufacturer of industrial packaging products and services. The company operates through three segments: Global Industrial Packaging; paper packaging and services; and Land Management.
On August 30, GEF announced quarterly cash dividends of $0.50 per share on Class A common stock and $0.75 per share on Class B common stock, payable on October 1, 2022. The $2 annual dividend .00 yields 3.37% compared to the prevailing prices. The company’s dividend payments are up 2.2% CAGR over the past three years and 2.3% CAGR over the past five years.
For the fiscal third quarter ended July 31, 2022, GEF’s net sales increased 8.8% year over year to $1.62 billion. The company’s operating profit increased 18.8% year-over-year to $205.70 million. Also, net income increased 23.4% year-over-year to $146.10 million, while Class A common stock EPS grew 24.9% year-over-year to $2.36.
For the fiscal year ending October 2022, GEF’s earnings per share and sales are expected to grow 43.2% and 16% year-over-year to $8.02 and $6.45 billion, respectively. It has surpassed consensus EPS estimates in each of the following four quarters.
The stock is down 1.4% in the past five days to close out its latest trading session at $59.34.
GEF’s POWR Ratings reflect this promising outlook. The stock has an overall rating of A, which translates to a strong buy in our proprietary rating system. It also has a B grade for value and quality. Within the A rating Industrial – Packaging industry, it ranks 3rd out of 22 stocks.
In addition to what we have mentioned above, we have also provided GEF figures for growth, momentum, stability and sentiment. Get all GEF ratings here.
WMT shares traded at $130.77 a share Friday afternoon, down $1.51 (-1.14%). Year-to-date, the WMT is down -8.54%, compared to a -23.65% increase in the benchmark S&P 500 index over the same period.
About the author: Kritika Sarmaho
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She received her bachelor’s degree in commerce and is currently enrolled in the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
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