This year has been challenging for businesses and investors as they grappled with geopolitical tensions, multi-decade high inflation, and the Fed’s aggressive interest rate hikes to combat it. After six interest rate hikes…
inflation finally showed signs of easing in October.
Federal Reserve Chairman Jerome Powell stated that smaller interest rate increases are likely ahead. Nonetheless, he cautioned that monetary policy would probably stay restrictive for some time until real signs of progress emerge on inflation.
A slower pace of interest rate hikes is expected to bring relief to investors. Many analysts now believe that the economy could face a mild recession.
Amid this backdrop, it could be wise to invest in fundamentally strong stocks CVS Health Corporation (CVS), Archer-Daniels-Midland Company (ADM), and Box, Inc. (BOX). Wall Street analysts believe that these stocks have more room to run.
CVS Health Corporation (CVS)
CVS provides health services in the United States. It operates through three segments: Health Care Benefits, Pharmacy Services, and Retail/LTC.
Over the last three years, CVS’ dividend payouts have grown at a 3.23% CAGR. Its four-year average dividend yield is 2.78%, and its forward annual dividend of $2.20 per share translates to a 2.14% yield. It paid a quarterly dividend of $0.55 per share on November 1, 2022.
On September 5, 2022, CVS and Signify Health (SGFY) entered a definitive agreement under which CVS Health will acquire Signify Health. CVS Health President and CEO Karen S. Lynch said, “This acquisition will enhance our connection to consumers in the home and enables providers to better address patient needs as we execute our vision to redefine the health care experience. In addition, this combination will strengthen our ability to expand and develop new product offerings in a multi-payor approach.”
TOP 10 STOCKS FOR THE YEAR AHEAD
For the fiscal third quarter ended September 30, 2022, CVS’ total revenues increased 10% year-over-year to $81.16 billion. Its adjusted operating income increased 3.9% year-over-year to $4.23 billion. The company’s adjusted income attributable to CVS increased 5.3% year-over-year to $2.76 billion. Moreover, its adjusted EPS came in at $2.09, representing an increase of 6.1% year-over-year.
Analysts expect CVS’ revenue and EPS for fiscal 2022 to increase 7.6% and 2.6% year-over-year to $314.35 billion and $8.62, respectively. It has an impressive earnings surprise history, surpassing the consensus EPS estimates in each of the trailing four quarters.
Over the past year, the stock has gained 14% to close the last trading session at $102.58. Wall Street expects the stock to hit $117.86 in the near term, indicating a potential upside of 14.9%.
CVS’ strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It is ranked first out of 4 stocks in the B-rated Medical – Drug Stores industry. It has an A grade for Growth and a B for Stability and Sentiment.
We have also given CVS grades for Value, Momentum, and Quality. Get all CVS ratings here.
Archer-Daniels-Midland Company (ADM)
ADM procures, transports, stores, processes, and merchandises agricultural commodities, products, and ingredients worldwide. The company operates through three segments: Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition.
Over the last three years…
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