The hotter-than-expected inflation and employment data indicate another aggressive interest rate hike by the Fed in November. Ellen Zentner, the chief U.S. economist at Morgan Stanley, said, "The minutes reaffirmed a clear commitment to remain on an aggressive path of policy tightening and maintain that higher level for longer, even as over-tightening risks are coming into view."
Consequently, market volatility is rife, as is evident from the CBOE Volatility Index's 78.4% year-to-date gains. However, dividend stocks are gaining investor attention amid widespread uncertainties. Jack Ablin, the chief investment officer of Cresset Capital, said, "Now that monetary policy is tightening, dividends are taking center stage again."
He added, "Investors reckon that dividends offer a modicum of certainty in an otherwise uncertain investing environment."
Given the backdrop, we think fundamentally sound dividend stocks Pfizer Inc. (PFE), ICL Group Ltd (ICL), and Karooooo Ltd. (KARO) could be wise buys to ensure a stable income stream.
Pfizer Inc. (PFE)
PFE discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. The company serves wholesalers, retailers, hospitals, clinics, government agencies, pharmacies, individual provider offices, and disease control and prevention centers.
On October 12, 2022, PFE and BioNTech SE (BNTX) announced that the U.S. Food and Drug Administration granted Emergency Use Authorization for their co-developed 10-µg booster dose of Omicron BA.4/BA.5-adapted bivalent COVID-19 vaccine in children aged 5 to 11 years of age. This approval should drive revenues in the near term.
On October 5, 2022, PFE completed its acquisition of biopharmaceutical company Global Blood Therapeutics, Inc. (GBT). This acquisition is expected to boost PFE’s capabilities.
PFE has paid dividends for 32 consecutive years. Over the last three years, PFE's dividend payouts have grown at a 5.7% CAGR. While PFE's four-year average dividend yield is 3.62%, its current dividend translates to a 3.67% yield.
PFE's total revenues came in at $27.74 billion for the second quarter that ended July 31, 2022, up 46.8% year-over-year. Its net income came in at $9.91 billion, up 78.1% year-over-year, while its EPS came in at $1.73, up 76.5% year-over-year.
Analysts expect PFE's revenue to increase 22.8% year-over-year to $99.83 billion in 2022. The stock's EPS is estimated to grow 45% year-over-year to $6.41 in 2022. It surpassed EPS estimates in all four trailing quarters. Over the past year, the stock has gained 5.2% to close the last trading session at $43.65.
PFE's POWR Ratings reflect this promising outlook. The company 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.
PFE has an A grade for Value and a B for Quality. Within the Medical - Pharmaceuticals industry, it is ranked #10 out of 161 stocks.
Click here for the additional POWR Ratings for Momentum, Growth, Stability, and Sentiment for PFE.
ICL Group Ltd (ICL)
Headquartered in Tel Aviv, Israel, ICL and its subsidiaries are specialty minerals and chemicals companies worldwide. It operates in four segments: Industrial Products; Potash; Phosphate Solutions; and Innovative Ag Solutions (IAS).
On September 1, 2022, ICL launched its new product, eqo.x, a ground-breaking fast biodegradable release technology for open-field agriculture. This product promises to optimize agricultural production while maintaining sustainability and increasing nutrient use efficiency by up to 80%.
On August 17, 2022, ICL and Lavie Bio Ltd., a subsidiary of Evogene Ltd. (EVGN), a leading computational biology company, announced a multi-year strategic collaboration agreement. This collaboration aims to be a landmark in the enhancement of fertilizer efficiency.
ICL has paid dividends for three consecutive years. Over the last three years, ICL's dividend payouts have grown at a 55% CAGR. While ICL's four-year average dividend yield is 3.56%, its current dividend translates to a 13.47% yield.
ICL's sales came in at $2.88 billion for the second quarter that ended June 30, 2022, up 78.1% year-over-year. Its net income came in at $563 million, up 302.1% year-over-year, while its EPS came in at $0.44, up 300% year-over-year.
Analysts expect ICL's revenue to increase 3.9% year-over-year to $6.67 billion in 2022. Its EPS is estimated to grow 8.5% year-over-year to $0.51 in 2022. It has surpassed EPS estimates in three of four trailing quarters. Over the past year, the stock has gained 4.7% to close the last trading session at $8.62.
ICL has an overall rating of A, equating to a Strong Buy in our POWR Ratings system. It has an A grade for Growth and a D for Value and Quality. It is ranked first among 30 stocks in the Agriculture industry.
Click here to access the additional POWR Ratings for ICL (Stability, Momentum, and Sentiment).
Karooooo Ltd. (KARO)
Headquartered in Singapore, KARO provides a mobility software-as-a-service (SaaS) platform for connected vehicles in several parts of the world. The company's offerings include Fleet Telematics, a fleet management SaaS platform that provides real-time insights, and LiveVision, which offers proactive risk management and fleet visibility.
On October 12, 2022, Zak Calisto, CEO, and Founder, said, "The solid and expected growth in both revenue and earnings in a challenging environment confirms our value proposition and cements our decade-plus track record of strategically investing for the future while scaling, growing and generating healthy profits."
KARO's four-year average dividend yield is marginal, and the current dividend translates to a 10.37% yield.
KARO's revenues came in at ZAR859.28 million ($602.75 million) for the second quarter that ended June 30, 2022, up 30.4% year-over-year. Its profit came in at ZAR155.48 million ($109.06 million), up 26.2% year-over-year, while its EPS came in at ZAR4.93, up 28.1% year-over-year.
Street expects KARO's revenue to increase 25.7% year-over-year to $3.45 billion in 2023. Its EPS is estimated to grow 23.7% year-over-year to $19.93 in 2023. Over the past three months, the stock has gained 8.2% to close the last trading session at $23.15.
KARO has an overall rating of B, equating to a Buy in our POWR Ratings system. It has an A grade for Quality and a D for Value, Sentiment, and Stability. It is ranked #7 out of 147 stocks in the Software - Application industry.
Click here to access the additional POWR Ratings for KARO (Growth and Momentum).
PFE shares were trading at $44.11 per share on Tuesday afternoon, up $0.46 (+1.05%). Year-to-date, PFE has declined -23.53%, versus a -21.31% 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.
3 Dividend Stocks to Buy That'll Pay You Forever StockNews.com
