3 stocks to buy now that offer stable and reliable income
Benchmarks are experiencing heightened volatility amid rising inflationary pressures and fears of further aggressive interest rate hikes by the Federal Reserve. The CBOE Volatility Index, which measures market volatility and sentiment, jumped 18.9% in the past month.
The 10-year Treasury yield jumped to its highest level since 2011 due to the Federal Reserve’s hawkish monetary policy. So far, efforts to rein in stubbornly high inflation appear to have yielded no results as it still sits near the 40-year high.
The Fed remains adamant on raising interest rates until it reaches its target levels. And economists believe that would push the economy into a recession by the end of the year. As the Fed’s hawkish stance continues to pressure the stock market, investors should consider adding dividend-paying stocks to protect their portfolios with steady income streams.
Therefore, it might make sense to add fundamentally strong PepsiCo, Inc. stocks (DYNAMISM), Costco Wholesale Corporation (COST) and Comcast Corporation (CMCSA), which provide stable and reliable income streams through dividends.
PepsiCo, Inc. (DYNAMISM)
PEP is a global food and beverage giant with a broad portfolio of non-alcoholic beverages. The Company’s segments include Frito-Lay North America, Quaker Foods North America and PepsiCo Beverages North America. Its product offering also includes branded dips, cheese snacks, tortillas and dairy products.
On August 2, 2022, PEP entered into a strategic agreement with Romanian premium spring water AQUA Carpatica under which the company will own a 20% stake in AQUA Carpatica. This partnership provides an opportunity to expand its offerings in Europe and other markets.
“With its great taste and premium positioning, AQUA Carpatica is a perfect complement to PepsiCo’s existing premium beverage portfolio,” said Silviu Popovici, CEO of PepsiCo Europe.
On July 21, 2022, the company’s board of directors paid the quarterly dividend of $1.15 per share on its common stock, representing a 7% year-over-year increase. This dividend is payable on September 30, 2022.
The company’s four-year average dividend yield is 2.82%, and its projected annual dividend of $4.60 translates into a yield of 2.72%. Its dividend has grown at a CAGR of 5.7% over the past three years and at a CAGR of 7.4% over the past five years. The company has increased its dividends for 49 consecutive years.
PEP’s net revenue increased 5.2% year-over-year to $20.22 billion for the second quarter ended June 11, 2022. The company’s gross profit increased 4.5% in year-on-year to $10.81 billion, while its non-GAAP operating profit rose 7.5. % of value a year ago at $3.41 billion. Additionally, its non-GAAP net income rose 8% year-over-year to $2.58 billion. Additionally, its non-GAAP EPS was $1.86, up 8.1% year-over-year.
Consensus PES the estimate of $1.83 for the third quarter ending September 30, 2022 represents a 2.3% year-over-year improvement. The consensus revenue estimate of $20.71 billion for the current quarter indicates a 2.6% increase over the same period last year. The company has an impressive track record of earnings surprises, beating consensus EPS estimates in each of the past four quarters.
Over the past year, the stock has gained 10% to close the last trading session at $168.92.
PEP’s strong fundamentals are reflected in its POWR Rankings. It has an overall rating of B, which equates to a buy in our proprietary rating system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
It has a B rating for stability, feeling and quality. In category A Beverages industry, it is ranked #10 out of 34 stocks. Click here to see PEP’s other ratings for growth, value and momentum.
Costco Wholesale Corporation (COST)
COST, a well-known member warehouse operator, offers branded and private label products in various merchandise categories. It operates in the United States, Canada, United Kingdom, Japan and China. Additionally, its broad product portfolio includes almost everything from dry groceries to car care products. It currently operates 833 warehouses.
COST’s four-year average dividend yield is 1.45%, and its current dividend translates to a yield of 0.72%. Its dividend has grown at CAGRs of 12.7% and 12.8% over the past three and five years, respectively. The company paid a quarterly dividend of $0.90 per share on August 12, 2022.
COST’s total revenue increased 16.2% year-over-year to $52.60 billion for the third quarter ended May 8, 2022. The company’s net income increased 10.9% in year-on-year to reach $1.35 billion. Additionally, its EPS came in at $3.04, representing a 10.5% year-over-year increase.
Analysts expect EPS and COST revenue for the quarter ended August 31, 2022 to increase 6.9% and 14.9% year-over-year to 4, respectively. 17 and 71.99 billion dollars. It has exceeded consensus EPS estimates in each of the past four quarters. Over the past three months, the stock has gained 11.8% to close the last trading session at $499.52.
COST’s POWR ratings reflect a strong outlook. According to our proprietary rating system, it has an overall rating of B, which equates to a buy.
It has a B grade for growth and sentiment. It is ranked No. 22 out of 38 stocks in the A rating Grocery stores / big box retailers industry. Click here to see additional COST ratings for Value, Momentum, Stability, and Quality.
Comcast Corporation (CMCSA)
CMCSA is a global media and technology company operating through five segments: Cable Communications; Media, studios; Amusement park; and Sky.
On September 14, 2022, the company’s board of directors announced an increase to its share buyback program, bringing the program’s overall authorization to $20 billion. This reflects the company’s strong cash flow and its ability to increase shareholder returns.
On July 28, 2022, the company announced a quarterly dividend of $0.27 per share, payable October 5, 2022.
CMCSA’s four-year average dividend yield is 1.99%, and its forward annual dividend translates to a yield of 3.19%. Its dividend has grown at a CAGR of 9.14% over the past three years and at a CAGR of 12% over the past five years.
CMCSA’s revenue increased 5.1% year over year to $30.02 billion in the fiscal second quarter (ended June 30, 2022). The company’s adjusted EBITDA increased 10.1% from the prior year value to $9.83 billion. Its adjusted net income rose 14.3% from the prior year’s value to $4.51 billion, while its adjusted EPS rose 20.2% from the year’s value previous $1.01.
Analysts expect CMCSA’s EPS and revenue to grow 10.7% and 2.1% year-over-year to $0.85 billion and $30.97 billion, respectively, in fourth fiscal quarter (ending December 2022). The company has exceeded consensus EPS estimates in each of the past four quarters, which is excellent.
CMCSA shares are down 12.5% over the past month to close the latest trading session at $33.84.
CMCSA has an overall rating of B, which translates to a buy in our proprietary rating system. It has a B rating for quality. Also, it is ranked #1 out of nine stocks in the Entertainment – TV and Internet providers industry.
In addition to the POWR ratings I just highlighted, you can see CMCSA ratings for Growth, Value, Momentum, Stability, and Sentiment. here.
PEP shares were trading at $171.01 per share Wednesday morning, up $2.09 (+1.24%). Year-to-date, the PEP has gained 0.45%, versus a -17.80% rise in the benchmark S&P 500 over the same period.
About the Author: Shweta Kumari
Shweta’s deep interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make informed investment decisions. After…