Ongoing fears of recession with the possibility that the Fed will maintain its policy until the inflation target of 2% is reached kept the market volatile. Amid uncertain market conditions, fundamentally strong stocks Oracle (ORCL), CNA Financial (CNA) and Weis Markets (WMK) make worthy additions to your portfolio this quarter. Continue reading….
Various macroeconomic and geopolitical headwinds have led to wild swings in the market this year. The S&P 500 is down nearly 16% year-to-date, and the Nasdaq Composite is down nearly 28% over that time.
The Federal Reserve has raised interest rates six times this year to rein in high inflation. While the October inflation data shows signs of slowing, the Fed is expected to raise rates until inflation stays above its 2% target.
Fed economists have warned that the chances of a recession next year have increased to nearly 50% on slowing consumer spending, global economic risks and more interest rate hikes.
Additionally, venture capitalist Doug Leone presented a bleak outlook for the global economy, warning that the current economic downturn is “harder and harderthan the recessions of 2000 and 2008. Leone does not expect the economy to recover until at least 2024.
Given the backdrop, it might make sense to invest in fundamentally sound stock Oracle Corporation (ORCL), CNA Financial Corporation (CNA) and Weis Markets, Inc. (WMK), which have the potential to provide some stability to your portfolio.
Oracle Corporation (ORCL)
ORCL offers products and services that address enterprise technology environments. The Company provides Oracle cloud software which includes cloud software applications, including Oracle Fusion cloud enterprise resource planning (ERP), Oracle Fusion cloud enterprise performance management, Oracle Advertising and NetSuite suite of applications.
On November 3, ORCL announced the launch of Oracle Public Safety Services, a new technology platform for law enforcement and first responders. The platform has a unified hardware and software suite and is an important addition to the company’s offerings.
In October, ORCL and NVIDIA Corporation (NVDA) announced a multi-year partnership to accelerate the adoption of AI in business. The collaboration will bring the full NVIDIA accelerated computing stack, from GPUs to systems to software, to Oracle Cloud Infrastructure (OCI).
“Our expanded alliance with NVIDIA will bring the best of both companies’ expertise to help customers in all industries – from healthcare and manufacturing to telecommunications and financial services – overcome the multitude of challenges they face.” , said Safra Catz, CEO of ORCL.
ORCL’s total revenue increased 17.7% year-over-year to $11.45 billion for the first quarter of fiscal 2023 that ended August 31, 2022. Its cloud services and license support amounted to $8.42 billion, up 14.2% year-over-year. Additionally, its service revenue grew 74.3% from the previous year’s value to $1.36 billion.
In addition, cash inflows from operating and financing activities amounted to $6.39 billion and $12.31 billion, up 18.6% and 207.3% from a year to year.
ORCL’s annual dividend of $1.28 per share yields 1.56% on the current price. Its dividend payouts have grown at a CAGR of 12% over the past three years and 12.2% over the past five years. Additionally, the company has increased its dividends for eight consecutive years.
Analysts expect ORCL revenue and EPS of $49.29 billion and $4.96 for the current fiscal year (ending May 2023), indicating an increase of 16, 1% and 1.3% year over year, respectively. Additionally, the company’s fiscal 2024 revenue and EPS are expected to grow 7.3% and 13.9% year-over-year to $52.89 billion and $5.65. , respectively.
Additionally, ORCL has exceeded consensus revenue estimates in each of the past four quarters. The stock has gained 12.7% over the past month and 17.9% over the past six months to close the latest trading session at $82.56.
ORCL’s strong fundamentals are reflected in its POWR Rankings. The stock’s overall B rating indicates a buy in our proprietary rating system. POWR ratings rate stocks on 118 different factors, each with its own weighting.
ORCL has a B rating for feeling and stability. In the Software app industry, it is ranked No. 21 out of 139 stocks.
Click here for additional POWR ratings for value, momentum, growth and quality for ORCL.
CNA Financial Corporation (CNA)
CNA offers P&C insurance products to businesses primarily in the United States. The Company operates through five segments: Specialty; Commercial; International; Life & Group; and Business and others.
The company markets its products through independent agents, brokers and general underwriters to small, medium and large businesses; insurance companies; and other groups in the oil and gas, financial services, healthcare and technology sectors.
During the third quarter of Fiscal 2022 ended September 30, 2022, CNA’s net premiums written from P&C insurance business increased 7.9% year-over-year to $2.06 billion. of dollars. Its Specialty and Commercial segment net premiums written were $840 million and $962 million, up 2.2% and 15.8% year-over-year, respectively.
Additionally, the company’s base revenue from P&C operations increased 19.8% from the prior year period to $260 million.
The company has increased its dividend for six consecutive years. It pays an annual dividend of $1.60, which represents a yield of 3.77% at the current share price. Its dividend payouts have grown at a CAGR of 4.6% over the past three years and 7.8% over the past five years.
Analysts expect CNA’s revenue for fiscal 2023 (ending Dec. 31, 2023) to grow 6.3% year-over-year to $12.75 billion. The company’s EPS for the next fiscal year is expected to rise 16.4% year-over-year to $4.42. Over the past month, CNA shares have gained 3.7% to close the last trading session at $42.20.
CNA’s POWR ratings reflect a promising outlook. The stock has an overall rating of B, which translates to a buy in our proprietary rating system.
CNA has an A rating for stability and a B for feeling and momentum. In the Insurance – P&C industry, CNA is ranked #8 out of 52 stocks.
Click here for additional POWR ratings for Quality, Value and Growth for CNA.
Weis Markets, Inc. (WMK)
WMK is a Mid-Atlantic food retailer engaged in food retailing through a supermarket chain. The Company primarily operates as Weis Markets and Weis, Weis Great Meals Start Here, Weis Gas-n-Go and Weis Nutri-Facts. It owns and operates more than 197 stores in Pennsylvania, Maryland, Delaware, New Jersey, New York, West Virginia and Virginia.
On October 31, the company’s chairman, president and CEO, Jonathan H. Weis, said, “As customers look for new ways to save, the Weis Gas Rewards program, Weis private label products Quality and our low cost programs offer strong value. We will build on our value proposition in the fourth quarter when customers can earn a free holiday turkey or ham based on their purchases. »
On October 27, WMK’s Board of Directors declared a 6.3% increase in the quarterly cash dividend from $0.32 to $0.34 per share, paid on November 21, 2022. The latest quarterly dividend increase in cash was 3.2% for the fourth quarter of fiscal 2021, from $0.31 to $0.32 per share.
The company pays $1.36 per year in dividends, which represents a yield of 1.59% at the current share price. Its average dividend yield over 4 years is 2.46%. Its dividend payouts have grown at a CAGR of 1.6% over the past three years.
WMK net sales grew 8.5% year-over-year to $1.15 billion, while same-store sales increased 7.9% year-over-year for the third fiscal 2022 quarter ended September 24, 2022. The company’s net income was $28.66 million, down from $28.51. million in the third quarter of 2021. Additionally, its earnings per share were $1.07, compared to $1.06 in the prior quarter.
The stock has gained 26.5% year-to-date and 27.6% over the past year to close the last trading session at $84.70.
WMK’s fundamental strength and solid outlook are reflected in its POWR ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
WMK has an A rating for stability and quality. It is ranked No. 11 out of 39 stocks in the A rating Grocery stores / big box retailers industry.
Click here to view additional POWR (Growth, Sentiment, Value, and Momentum) ratings for WMK.
ORCL shares were unchanged in premarket trading on Thursday. Year-to-date, the ORCL is down -3.69%, compared to a -14.29% rise in the benchmark S&P 500 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. Using its fundamental approach to stock analysis, Mangeet seeks to help retail investors understand the underlying factors before making investment decisions.
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