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Resurgent recession fears will continue to put pressure on stock markets in the coming months as the Federal Reserve is expected to raise interest rates higher than expected. Therefore, it may be prudent to own stocks in blue-chip companies with long-term growth potential, such as Johnson & Johnson (JNJ), Humana, Inc. (HUM), and Autozone, Inc. (AZO). Even in the face of immediate hurdles. Keep reading…
In light of recent positive economic data, Fed Chairman Jerome Powell has opened the door for a bigger rate hike. Equity markets are expected to remain volatile in the short term on renewed recession fears driven by expectations of more aggressive tightening. Investors can therefore consider purchasing a strong stake in Johnson & Johnson (JNJ), Humana (ham), and Autozone (Azo), which has a promising outlook.
Fed Chairman Jerome Powell recently said the central bank would probably raise interest rates further Higher than previously expected in response to recent strong economic data, and we are poised to return to a faster pace of rate hikes if the data continues to be hot ahead.
In response to Powell’s hawkish testimony, Goldman Sachs (GS) the economist Fed’s Peak Interest Rate Projected to be 5.5% to 5.75%“Data ahead of the March meeting are mixed, but we expect the net to be strong, so our current forecast of a 25 basis point rate hike in March is a close call, with the FOMC expected to rise by 50 basis points. There is a risk of a possible rate hike. Basis points instead,” economists led by Jan Hatzius wrote in a note to clients.
In addition, Citigroup Inc. (Ha) economists believe the Fed 50 basis points benchmark rate at the March meeting.
Furthermore, according to Rick Reader, chief investment officer of BlackRock’s global fixed income division, the Fed raise the rate to 6% Keep them high for an extended period of time to combat stubborn inflation. Expectations of more aggressive action by the Federal Reserve have revived recession fears, crushing riskier corners of the stock market.
In an uncertain macroeconomic environment, it may be prudent to invest in stocks of quality companies that are well positioned for long-term growth. Let’s discuss what JNJ, HUM, and AZO can do to weather short-term headwinds and emerge as long-term winners.
Johnson & Johnson (JNJ)
JNJ researches, develops, manufactures and markets a wide range of healthcare products around the world. The company operates in his three segments, Consumer Health. pharmaceuticals; and medtech. Its main emphasis is on human health and well-being products.
On December 22, 2022, JNJ completed the acquisition of Abiomed, Inc (ABMDMore). “This acquisition will enable Johnson & Johnson to accelerate the growth of its medtech business and bring innovative medical technologies to more people around the world,” said Joaquín Duato, CEO of JNJ. It’s another important step in getting there.”
JNJ’s U.S. sales increased 2.9% year-over-year to $12.52 billion in the fourth quarter of the fiscal year ended December 31, 2022. Adjusted earnings before income tax provisions increased 17% year over year to $7.42 billion.In addition, the company’s adjusted net income and EPS They increased 9.5% and 10.3% year-on-year to $6.22 billion and $235 million, respectively.
JNJ has a track record of increasing dividends for 60 consecutive years. The annual dividend is $4.52 per share for him, which at current price levels gives him a 2.96% yield. The company’s four-year average dividend yield is his 2.60%, and dividend payouts have increased at his CAGR of 6.1% over the past five years.
Analysts expect JNJ’s revenue to grow 2.8% year-over-year to $97.62 billion for the fiscal year ending December 2023. The company’s EPS for the current year is expected to be $10.51, up 3.6% year-over-year. Additionally, JNJ outperformed consensus EPS estimates in all four of his quarters. This is impressive.
Additionally, JNJ’s revenue and EPS are expected to grow 2.6% and 4.1% year-over-year in 2024 to $100.2 billion and $10.94, respectively. The stock fell 8.1% to close the last trading session at $151.24.
JNJ’s strong fundamentals are POWR ratingThe stock has an overall rating of A, which equates to a strong buy in our proprietary rating system. The POWR Rating is calculated taking into account 118 different factors, each weighted to an optimal degree.
JNJ has an A grade for Stability and a B grade for Emotion, Value, and Quality. Ranked 6th out of 169 shares Medical – Pharmaceuticals industry.
In addition to the POWR rating I just highlighted, you can see JNJ’s growth and momentum rating. here.
Humana Co., Ltd. (ham)
HUM operates as a health and wellbeing company in the United States. It operates through two segments: Insurance and Centerwell. The company offers medical and supplemental benefit plans to individuals. It also provides pharmacy solutions, provider services, and home solutions services to Health His plan members and third parties.
On March 2, 2023, HUM and Aledade, the nation’s largest independent primary care network, announced a 10-year collaboration to deliver value-based primary care to Humana’s Medicare Advantage members by Aledade-enabled physicians within the network. announced.
“Aledade will be one of Humana’s largest value-based care providers in 2022, and our relationship will help identify disease early,” said George Renaudin, President, Medicare and Medicaid at HUM. continue our goal of improving access to proactive screening to treat , we can see results through better quality care and reduced healthcare costs.”
On February 16, HUM announced that its board of directors has declared a cash dividend of $0.885 per share to shareholders, to be paid on April 28, 2023. The dividend of $0.885 per share reflects his 12.4% increase from his previous dividend of $0.7875 per share.
HUM’s current dividend yield is 0.72% per annum, with an average four-year dividend yield of 0.65%. Over the past five years, its dividend has increased at his CAGR of 14.5%. The company has increased its dividend for six years in a row.
HUM adjusted revenues for the fourth quarter ended December 31, 2022 were $22.44 billion, up 6.6% year-over-year. Adjusted pre-tax results were $263 million, an increase of 58.4% year over year. The company’s adjusted EPS increased 30.7% year-over-year to $1.62. In addition, adjusted operating cash inflow was $651 million and operating cash outflow was $96 million in the year-ago quarter.
Analysts expect HUM’s revenue and EPS to grow 11.9% and 11.4% year-over-year in fiscal 2023 to $103.91 billion and $28.12, respectively. The company’s fiscal 2024 revenue and EPS are estimated to grow 8.7% and 13.6% year-on-year to $112.95 billion and $31.95, respectively. Exceeded consensus EPS forecasts in all four subsequent quarters.
HUM’s stock has surged 13.3% over the past year to close its last trading session at $486.33.
HUM’s positive outlook is reflected in its POWR rating. The stock has an overall rating of B, which is equivalent to a buy in our proprietary rating system.
HUM has a B grade in Growth, Value, and Sentiment. Ranked 4th out of 10 A rated stocks Medical – health insurance industry. click here For additional POWR ratings for HUM stability, momentum, and quality.
Auto Zone Co., Ltd. (Azo)
AZO is a retailer and distributor of automotive replacement parts and accessories. The company’s products include A/C compressors, batteries and accessories, belts and hoses, bearings, calipers, clutches, engines, fuel pumps, ignition and lighting products, radiators, thermostats, and water pumps. We have stores in the USA, Mexico and Brazil.
On February 28, 2023, AZO Chairman, President and CEO Bill Rhode said: We take nothing for granted as we continue to focus on our long-term approach to growing operating income and free cash flow while effectively leveraging our balance sheet. “
For the second quarter of the fiscal year ended February 11, 2023, AZO’s net sales increased 9.5% year-over-year to $3.69 billion and gross profit increased 8.1% year-over-year to $1.93 billion . The company’s operating profit was $669.98 million, up 6.9% year-on-year. Net earnings increased 1% year-over-year to $476.54 million, with net earnings per share of $24.64, up 10.5% year-over-year.
AZO’s revenue and EPS for the current fiscal year (ending August 2023) are expected to grow 7.5% and 9.9% from the prior year to $17.48 billion and $128.79, respectively. Additionally, the company has beaten consensus earnings and EPS estimates in each of his four quarters since.
Additionally, analysts expect the company’s revenue and EPS to grow 5.2% and 13.3% year-on-year to $18.38 billion and $145.95, respectively. The stock has gained 10.2% over the past six months and 28.5% over the past year to close the last trading session at $2,422.19.
AZO’s POWR rating reflects a promising outlook. The stock has an overall rating of B, which converts to a buy in our proprietary rating system.
AZO has an A grade for quality and a B grade for growth and emotion. Out of 60 A rated stocks Auto parts It ranks 20th in the industry.
click here Access additional AZO ratings for value, momentum, and stability.
Consider this before making your next trade…
We are still in the middle of a bear market.
Yes, some special stocks can go up. But most will fall as the bear market claws lower than ever before.
That’s why we need to discover new things.”2023 stock trading planwas created by 40-year investment veteran Steve Lightmeister. So he explains:
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Watch this timely presentation before making your next trade.
JNJ shares rose $0.06 (+0.04%) in pre-market trading on Friday. Year-to-date, JNJ is down -13.77%, while the benchmark S&P 500 index is up 2.39% for him over the same period.
About the author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Mangeet uses her foundational approach to equity analysis to help individual investors understand the underlying factors before making an investment decision.
post 3 Powerful Stocks to Buy in 2023 first appeared StockNews.com