The stock market has been under immense pressure this year due to worries about high inflation and the Fed's aggressive interest rate hikes to control it. Additionally, according to the Bureau of Economic Analysis, the U.S. economy contracted at a 0.6% annual rate from April through June.
The Dow Jones Industrial Average made a significant recovery from its 2022 low on Wednesday as the Bank of England announced it would purchase bonds to calm its financial markets. However, analysts are concerned that the Fed's policies may eventually drive the U.S. economy into a recession.
Given the grim future outlook, we think investors could consider scooping up the shares of low-beta stocks AbbVie Inc. (ABBV), Pfizer Inc. (PFE), and The Coca-Cola Company (KO) with impressive growth attributes.
AbbVie Inc. (ABBV)
ABBV is a biopharmaceutical research company. The company is involved in the research, development, manufacturing, commercialization, and sale of medicines and therapies. In addition, it has a research collaboration with Dragonfly Therapeutics, Inc. The stock has a beta of 0.69.
Recently, ABBV reported that the U.S. Food and Drug Administration (FDA) authorized Skyrizi (risankizumab), the first and only specific interleukin-23 inhibitor, for the treatment of adults with moderately to severely active Crohn's disease (CD). The approval is backed up by three pivotal Phase 3 studies in which Skyrizi significantly outperformed placebo as both an induction and maintenance therapy for clinical remission and endoscopic response.
Also, ABBV announced that the FDA had approved Rinvoq (upadacitinib, 15 mg once daily) for the treatment of adults with active ankylosing spondylitis (AS) who have had an inadequate response or intolerance to one or more tumor necrosis factor (TNF) blockers.
The approval is based on data from two pivotal clinical trials in which Rinvoq provided rapid and meaningful disease control. This is the fifth FDA-approved indication for Rinvoq in chronic immune-mediated diseases.
During the second quarter ended June 30, 2022, ABBV's net revenue increased 4.5% year-over-year to $14.58 billion. Its operating earnings came in at $3.29 billion. The company's net earnings grew 20.6% from the year-ago value to $924 million, while its adjusted EPS grew 11.3% from the prior-year quarter to $3.37.
Street expects ABBV's revenues and EPS to rise 5.2% and 17.2% year-over-year to $59.01 billion and $13.87, respectively, in fiscal 2022. The stock has gained 31.1% over the past year and 5.2% over the past month.
ABBV's POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
ABBV also has an A grade for Quality and a B for Growth. Within the D-rated Medical – Pharmaceuticals industry, it is ranked #11 of 162 stocks. To see additional POWR Ratings for Sentiment, Momentum, Value, and Stability for ABBV, click here.
Pfizer Inc. (PFE)
PFE is a well-known biopharmaceutical product developer and distributor of medications, vaccines, and other therapies. Pfizer gained popularity among investors after the breakthrough in countering the Covid-19 pandemic through its COVID-19 vaccine developed in collaboration with BioNTech SE (BNTX). PFE has a beta of 0.65.
This month, Strata Oncology, Inc., a next-generation precision oncology company that enables better and earlier cancer treatment, has expanded its clinical cooperation with PFE in the Strata Precision Indications for Approved THerapies (Strata PATHTM) trial.
Pfizer will supply Braftovi, Mektovi, and Lorbrena to up to six new cohorts of patients with early-stage lung, melanoma, colorectal, and other malignancies with evidence of micrometastatic illness following initial treatment.
Also, this month, FDA and EMA accepted the regulatory submission of PFE’s Ritlecitinib for Individuals 12 years and older with Alopecia Areata. The FDA is expected to make a decision in the second quarter of 2023, while the European Medicines Agency (EMA) accepted the Marketing Authorization Application, with a decision expected in the fourth quarter of 2024.
PFE’s revenue increased 46.8% year-over-year to $27.7 billion for the second quarter ended July 03, 2022. Its net income improved 78% year-over-year to $9.91 billion. The company’s EPS increased 77% from its year-ago value to $1.73.
Its EPS is expected to grow 11.9% year-over-year to $1.5 in the current quarter ending September 2022. In addition, its revenue is expected to grow 23.5% year-over-year to $100.43 billion. The stock has gained 1.5% over the past year.
It is no surprise that PFE has an overall A rating, which equates to a Strong Buy in our POWR Ratings system. The stock also has an A grade for Quality and a B for Value. In the same industry, it is ranked #9.
Beyond the POWR Ratings grades I have just highlighted, you can view PFE’s ratings for Growth, Sentiment, Momentum, and Stability.
The Coca-Cola Company (KO)
KO owns or licenses beverage concentrates, sparkling soft-drink brands, energy drinks, dairy, and syrups and offers them to fountain retailers such as restaurants and convenience stores. It operates through independent bottling partners, distributors, wholesalers, retailers, and bottling and distribution companies. The stock has a beta of 0.54.
This month, Molson Coors Beverage Company (TAP) expanded its collaboration with KO to create and commercialize Topo Chico Spirited, a range of spirit-based, ready-to-drink cocktails inspired by the bright and refreshing taste of some of America's most beloved tequila and vodka-based beverages.
The agreement is another milestone in Molson Coors and The KO's relationship, following the recent launch of Simply Spiked LemonadeTM and a successful first year of national distribution for Topo Chico Hard Seltzer, which is currently the fastest-growing brand in its competitive set over the most recent 52-week period.
During the second quarter ended July 01, 2022, its organic revenue, which excludes currency fluctuations and acquisitions or divestitures, increased by 16%, as the company’s pricing and packaging mix increased by 12%. The global case volume of the company increased by 8%. Its non-GAAP EPS grew 4% year-over-year to $0.70.
Analysts expect KO’s revenues and EPS to rise 9% and 6.5% year-over-year to $42.15 billion and $2.47, respectively, in fiscal 2022. In addition, KO’s EPS is expected to rise 5.5% in the current quarter. Moreover, the company has an impressive earnings surprise history, as it topped Street EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 6.8%.
KO's strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, equating to a Buy. KO also has a B grade for Stability, Sentiment, and Quality. The stock is ranked #17 of 33 in the A-rated Beverages industry.
In addition to the POWR Ratings grades I have just highlighted, you can see KO’s Momentum, Growth, and Value ratings.
ABBV shares were trading at $136.16 per share on Friday afternoon, down $6.56 (-4.60%). Year-to-date, ABBV has gained 3.43%, versus a -23.15% rise in the benchmark S&P 500 index during the same period.
About the Author: Pragya Pandey
Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate.
3 Safe Stocks You'll Want to Have Exposure to in 2022 StockNews.com
