Despite the October inflation report turning out better than expected, billionaire investor and Icahn Enterprises chairman Carl Icahn believes that stocks might tumble further in the near future. Moreover, rising recession odds are pretty concerning.
The International Monetary Fund sees a tough time ahead amid persistently high and broad-based inflation, weak growth momentum in China, and ongoing supply disruptions and food insecurity caused by Russia’s invasion of Ukraine.
“The challenges that the global economy is facing are immense, and weakening economic indicators point to further challenges ahead,” the IMF said.
Given the backdrop, investors could consider buying quality stocks, Johnson & Johnson (JNJ) and The Coca-Cola Company (KO), which boast solid dividend-paying records.
Johnson & Johnson (JNJ)
JNJ and its subsidiaries research, develop, manufacture, and sell various products in the healthcare field worldwide. Its segments are Consumer Health; Pharmaceutical; and MedTech.
On November 1, 2022, JNJ and Abiomed, Inc. (ABMD), a medical device technology company, announced their definitive agreement under which JNJ will acquire all outstanding shares of ABMD. This acquisition is expected to help JNJ enhance its Med-tech segment and make valuable contributions to cardiovascular treatment and therapy.
JNJ has paid dividends for 59 consecutive years. Its dividend payouts have increased at a 6% CAGR over the past five years. Its current dividend yield is 2.67%, and the four-year average yield is 2.60%.
JNJ’s sales came in at $23.79 billion for the 2022 third quarter, up marginally year-over-year. Its net earnings came in at $4.46 billion, up 21.6% year-over-year, while its EPS came in at $1.68, up 22.6% year-over-year.
For 2022, analysts expect JNJ’s revenue to increase marginally year-over-year to $95.04 billion. Its EPS is expected to increase by 3.9% per annum for the next five years. It surpassed EPS estimates in all four trailing quarters. Over the past month, the stock has gained 4% to close the last trading session at $169.25.
JNJ’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our POWR Rating system. The POWR Ratings assess stocks by 118 different factors, each with its weighting.
Also, the stock has an A grade for Stability and a B grade for Quality. Within the Medical – Pharmaceuticals industry, it is ranked #8 out of 162 stocks. Click here for the additional POWR Ratings for Growth, Value, Momentum, and Sentiment for JNJ.
The Coca-Cola Company (KO)
Beverage company KO manufactures, markets, and sells various non-alcoholic beverages worldwide. The company provides sparkling soft drinks, flavored and enhanced water, sports drinks, juice, dairy, plant-based beverages, tea, coffee, and energy drinks.
On October 25, 2022, James Quincey, KO’s Chairman and CEO, said, “Our business is resilient amidst a dynamic operating and macroeconomic environment. We are investing in our strong portfolio of brands, which is a cornerstone of our ability to deliver long-term value for our stakeholders.”
KO has paid dividends for 59 consecutive years. Its dividend payouts have increased at a 3.6% CAGR over the past five years. Its current dividend yield is 2.87%, while its four-year average yield is 3.08%.
KO’s net operating revenues came in at $11.06 billion for the third quarter ended September 30, 2022, up 10.2% year-over-year. Its net income came in at $2.83 billion, up 14.3% year-over-year, while its EPS came in at $0.65, up 14% year-over-year.
Street expects KO’s revenue to increase 10.5% year-over-year to $42.70 billion in 2022. Its EPS is expected to grow 6.9% year-over-year to $2.48 in 2022. The stock surpassed EPS estimates in all four trailing quarters. Over the past month, the stock has gained 12.6% to close the last trading session at $61.32.
KO’s overall B rating translates to a Buy in our proprietary rating system. It has a B grade for Stability, Sentiment, and Quality.
KO is ranked #20 out of 34 stocks within the A-rated Beverages industry. Click here for the additional POWR Ratings for KO (Growth, Value, Momentum).
JNJ shares were trading at $171.80 per share on Monday morning, up $2.55 (+1.51%). Year-to-date, JNJ has gained 2.40%, versus a -15.43% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
2 Stocks Every Investor Should Make Room in Their Portfolio For StockNews.com
