The stock market is expected to remain under pressure as continued rate hikes amid still-high inflation weigh in. However, adding quality dividend stocks could provide some hedge against market uncertainties and help ensure a steady income stream.
Dividend stocks tend to be popular among investors in or nearing retirement. We think fundamentally strong dividend-paying stocks Cardinal Health, Inc. (CAH) and Sisecam Resources LP (SIRE) might be great additions to one’s retirement portfolio.
While hopes of the economy avoiding a recession has been rising recently, 58% of the economists surveyed by the National Association for Business Economics envision a recession sometime this year.
Moreover, Oren Klachkin, lead U.S. economist at Oxford Economics, also predicts that rate hikes will send the economy into recession in 2023. However, the downturn is expected to be moderate in comparison to previous recessions.
So, let's delve deeper into these stocks mentioned above:
Cardinal Health, Inc. (CAH)
CAH is an integrated healthcare service and solutions provider. It offers customized solutions for healthcare organizations like hospitals, pharmacies, ambulatory surgery facilities, clinical laboratories, and patients receiving care at home. The company operates through two segments: Pharmaceutical and Medical.
On February 16, 2023, CAH and RxLive collaborated with Outcomes to increase data exchange and bridge communication gaps between hospitals, physicians, and pharmacists. This venture is expected to enhance the company's services.
Also, in January, CAH partnered with Palantir Technologies Inc. (PLTR), a prominent provider of enterprise operating systems.
CAH aims to reshape the pharmaceutical supply chain with innovative procedures, products, and solutions to improve access to critical pharmaceuticals and streamline pharmacy inventory management using PLTR's platform.
CAH has paid dividends for 28 consecutive years. Over the last three years, CAH's dividend payouts have grown at a 1% CAGR. While CAH's four-year average dividend yield is 3.60%, its current dividend translates to a 2.61% yield.
CAH's revenues came in at $51.47 billion for the second quarter that ended December 31, 2022, up 13.2% year-over-year. Moreover, its gross margin was $1.66 billion, indicating a marginal increase year-over-year.
The company's total current assets came in at $34.60 billion for the period ended December 31, 2022, compared to $32.94 billion for the period ended June 30, 2022.
Street expects CAH's revenue to increase 12% year-over-year to $203.06 billion in 2023. Its EPS is expected to grow 7.9% year-over-year to $5.46 in 2023. The stock has gained 43.8% over the past year to close the last trading session at $75.98.
CAH's strong fundamentals are reflected in its POWR Ratings. The stock's overall A rating indicates a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
CAH has an A grade for Growth and Value. In the Medical - Services industry, it is ranked #2 out of 78 stocks. Click here for the additional POWR Ratings for Stability, Momentum, Sentiment, and Quality for CAH.
Sisecam Resources LP (SIRE)
SIRE engages in the trona ore mining and soda ash production businesses internationally. It processes trona ore into soda ash, a raw material in flat glass, container glass, chemicals, paper, and other consumer and industrial products.
On February 1, 2023, CEO Ertugrul Kaloglu said, "In the current environment of increased uncertainty with interest rates, inflation, and recession concerns, the Partnership remains focused on maintaining a conservative capital structure, working capital management liquidity flexibility to continue to meet future cash flow requirements."
Over the last three years, SIRE's dividend payouts have grown at 13.7% CAGR. While SIRE's four-year average dividend yield is 7.11%, its current dividend translates to a 7.95% yield.
SIRE's total net sales came in at $177.10 million for the fourth quarter ended December 31, 2022, up 13.5% year-over-year. Its net income increased 43.6% year-over-year to $16.80 million. Moreover, its EPS came in at $0.83, up 48.2% year-over-year.
SIRE has gained 34.6% over the past nine months to close the last trading session at $25.17.
It's no surprise that SIRE has an overall A rating, equating to a Strong Buy in our POWR Ratings system.
It has an A grade for Growth and Quality and a B for Growth, Value, Stability, and Quality. It is ranked first among the 86 stocks in the B-rated Chemicals industry. To see SIRE's ratings for Sentiment and Momentum, click here.
Consider This Before Placing Your Next Trade…
We are still in the midst of a bear market.
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You owe yourself to watch this timely presentation before placing your next trade.
CAH shares were trading at $74.59 per share on Thursday afternoon, down $1.39 (-1.83%). Year-to-date, CAH has declined -2.97%, versus a 3.00% rise in the benchmark S&P 500 index during the same period.
About the Author: RashmiKumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.
2 Solid Stocks for Retirees to Buy in 2023 StockNews.com
