Stocks declined for a second day on Wednesday as the Federal Reserve indicated that it would take a more aggressive approach to its policy changes to combat inflation, raising concerns of an economic slowdown. The Dow Jones Industrial Average fell 144.67 points to 34,496.51, while the S&P 500 slid 0.97% to 4,481.15. The Nasdaq Composite declined 2.22% to 13,888.82 after sliding about 2.3% on Tuesday.
“It was a warning to anyone who thinks that the Fed is going to be more dovish in their fight against inflation,” asserted Quincy Krosby, chief equity strategist at LPL Financial. Furthermore, the Russia-Ukraine war threatens to slow the global economy, further hindering supply chains and fostering renewed economic uncertainty.
Given the heightened market volatility, we think fundamentally solid dividend stocks AmerisourceBergen Corporation (ABC), EOG Resources, Inc. (EOG), and Archer-Daniels-Midland Company (ADM) could be good additions to one’s portfolio to ensure a stable stream of income.
AmerisourceBergen Corporation (ABC)
ABC is a global pharmaceutical sourcing and distribution services company that operates through two segments U.S. Healthcare Solutions and International Healthcare Solutions. ABC is headquartered in Chesterbrook, Pa.
ABC’s $1.84 annual dividend yields 1.16% at its current share price. On February 2, the company declared a $0.46 quarterly dividend, which was payable on February 28. ABC’s dividend payouts have increased at a CAGR of 4.9% over the past three years and 5% over the past five years. It has a record of 17 consecutive years of dividend growth.
ABC’s revenue increased 13.5% from the prior-year quarter to $59.63 billion in its fiscal first quarter, ended Dec.31, 2021. Its operating income was $644.41 million, up 17.8% year-over-year, while the net income attributable to ABC for the quarter came in at $449.11 million, reflecting a 19.8% increase year-over-year. Its EPS stood at $2.13 billion, up 17.7% year-over-year.
ABC’s revenue for its fiscal second quarter, ending March 31, 2022, is expected to be $57.19 billion, indicating 16.4% year-over-year growth. The company’s EPS is expected to increase 14.8% from the year-ago value to $2.90. ABC also beat the consensus EPS estimates in each of the trailing four quarters.
ABC’s stock has gained 36.3% in price over the past year and 35.3% over the past six months to close its last trading session at $158.14.
ABC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to Buy in our POWR ratings system. The POWR ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
The company also has a B grade in Growth, Value, and Stability. It is ranked #11 of 84 stocks in the Medical – Services industry.
To get ABC’s ratings for Momentum, Quality, and Sentiment, click here.
Click here to checkout our Healthcare Sector Report for 2022
EOG Resources, Inc. (EOG)
EOG in Houston, Tex., is an independent oil and natural gas company that explores for, develops, produces, and markets crude oil, natural gas liquids (NGLs), and natural gas.
EOG identified 700 new net double-premium locations in 2021, replacing 170% of the approximately 410 net double-premium wells drilled in 2021. The new double-premium locations are spread across EOG’s portfolio of high-return plays. Its double-premium inventory increased to 6,000 net locations, representing more than 11 years of drilling at EOG’s current pace.
EOG’s $3 annual dividend yields 2.53% at its current share price. On February 24, EOG declared a $0.75 per share dividend, payable April 29, 2022, to stockholders of record as of April 15, 2022. EOG also declared a special dividend of $1.00 per share, which was paid on March 29, 2022. Its dividend payouts have increased at a 34.9% CAGR over the past three years and 24.3% over the past five years.
EOG’s total revenue increased 103.8% year-over-year to $6.04 billion in its fiscal fourth quarter, ended Dec. 31, 2021. Its non-GAAP net income grew 339.4% from its year-ago value to $1.81 billion, while its non-GAAP net income per share increased 335.2% to $3.09. The company’s net cash provided by operating activities increased 182.4% year-over-year to $3.17 billion.
The $3.28 consensus EPS estimate for its fiscal first quarter, ending March 31, 2022, represents a 102.6% improvement year-over-year. The $5.12 billion consensus revenue estimate for the same quarter represents a 38.6% increase from the same period last year. Also, EOG topped the Street’s EPS estimates in three of the trailing four quarters.
Over the past year, EOG stock has gained 69.8% in price and 40% over the past six months to close its last trading session at $118.45.
EOG’s POWR Ratings reflect this promising outlook. The company has an overall rating of B, translating to Buy in our proprietary rating system.
EOG has an A grade in Momentum and a B in Growth, Quality, and Sentiment. It is ranked #20 of the 96 stocks in the Energy – Oil & Gas industry.
Beyond what is stated above, we have also rated EOG for Value and Stability. Get all the EOG ratings here.
Archer-Daniels-Midland Company (ADM)
ADM in Chicago is an agricultural origination and processing company that develops sustainable human and animal nutrition. It operates under three business segments: Ag Services and Oilseeds; Carbohydrate Solutions; and Nutrition.
In January, ADM and Wolf Carbon Solutions US LLC, an affiliate of Wolf Midstream (Wolf), an energy infrastructure organization, announced their signing of a Letter of Intent to advance the decarbonization of ADM’s footprint. With Wolf Carbon Solutions’ expertise in owning and operating carbon capture facilities, this partnership should help ADM deliver its sustainability objectives.
ADM’s $1.60 annual dividend yields 1.72% at its current share price. On January 25, the company declared a $0.40 quarterly dividend, which was payable on March 1. Its dividend payouts have increased at a 3.7% CAGR over the past three years and 4.4% over the past five years. It has a record of 28 consecutive years of dividend growth.
ADM’s revenues increased 28.4% year-over-year to $23.09 billion in its fiscal fourth quarter, ended Dec. 31, 2021. Its gross profit improved 22% year-over-year to $1.65 billion. Its net earnings attributable to ADM increased 13.8% from its year-ago value to $782 million, while its EPS stood at $1.38, up 13.1% year-over-year in the same period.
The $5.28 consensus EPS estimate for its fiscal year ending Dec. 31, 2022, represents a 1.71% improvement year-over-year. The $88.23 billion consensus revenue estimate for the same period represents a 3.5% increase from the last year. Also, it has an impressive earnings surprise history; it topped the Street’s EPS estimates in each of the trailing four quarters.
The stock has gained 59.9% in price over the past year to close yesterday’s trading session at $92.83. It gained 56.2% over the past nine months.
ADM’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our POWR Ratings system.
ADM also has an A grade in Growth and a B in Value and Sentiment. Among the 31 stocks in the Agriculture industry, it is ranked #3.
Click here to view additional ADM ratings for Stability, Momentum, and Quality.
What To Do Next?
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ABC shares were trading at $158.55 per share on Thursday morning, up $0.41 (+0.26%). Year-to-date, ABC has gained 19.70%, versus a -5.98% rise in the benchmark S&P 500 index during the same period.
About the Author: Komal Bhattar
Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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