The stock market has suffered immense volatility lately due to the multi-decade high inflation, the Fed’s hawkish stance, geopolitical instability, and a possible economic slump. The S&P 500 plunged 17.4% year-to-date, while the Dow Jones and Nasdaq Composite declined 12.4% and 25.1%, respectively.
However, the stocks rallied yesterday as traders bet on robust corporate earnings. The S&P 500 gained 2.8%, while the Dow Jones and Nasdaq Composite rose 2.4% and 3.1%, respectively.
Despite the relief rally, the stock market is expected to remain under pressure in the near term. The Consumer Price Index (CPI) index accelerated 9.1% year-over-year in June, exceeding the 8.8% Dow Jones estimate. The hotter-than-expected inflation data could make the Fed even more aggressive in raising the benchmark interest rates, exacerbating recession fears.
During an economic turmoil, investors should hold stocks of businesses that are reliable, profitable, and resilient. Shares of blue-chip companies usually stay resilient to market fluctuations and deliver stable returns because of their broader market reach, superior price power, strong fundamentals, and steady cash flows.
Shares of blue-chip companies BASF SE (BASFY), Barclays PLC (BCS), The Hershey Company (HSY), and Marathon Petroleum Corporation (MPC) are well-positioned to navigate the market volatility. So, it could be wise to add these stocks to your portfolio.
BASF SE (BASFY)
Headquartered in Ludwigshafen, Germany, BASFY operates as a chemical company worldwide. The company operates through six segments: Chemicals; Materials; Industrial Solutions; Surface Technologies; Nutrition & Care; and Agricultural Solutions. It has strategic partnerships with Contemporary Amperex TechnologyCo., Limited on battery materials solutions.
On July 19, BASFY confirmed the final phase of the expansion project for the methylene diphenyl diisocyanate (MDI) plant at its Verbund site in Geismar, Louisiana. With this third step of its multiphase capacity expansion, BASFY might increase production capacity to 600,000 metric tons per year by the middle of the decade and support the growth of its North American MDI customers.
On June 28, BASFY announced an increase in the production capacity for key specialty amines manufactured at its Geismar, Louisiana site. After the production capacity expansion of world-scale production assets by mid-2023, BASFY will be able to produce its polyether amines and tertiary amines marketed under the Baxxodur® and Lupragen™ brands.
“This investment underlines our commitment to continuously support the growth of our customers with high-quality specialty amines. The additional capacity in Geismar will allow us to respond quickly and reliably to increasing market demand,” said Kevin Anderson, Vice President, Business Management Amines, Acetylenics, and Carbonyl Derivatives, Chemical Intermediates, North America for BASFY.
In the fiscal 2022 first quarter ended March 31, 2022, BASFY's sales increased 19% year-over-year to €23.08 billion ($23.56 billion), and gross profit grew 17.7% from the year-ago value to €6 billion ($6.12 billion). The company’s income from operations rose 20.5% year-over-year to €2.79 billion ($2.85 billion).
BASFY’s EBITDA came in at €3.71 billion ($3.79 billion), up 16.8% from the prior-year period. Its adjusted earnings per share improved 35% year-over-year to €2.70.
The consensus revenue estimate of $23.84 billion for the fiscal 2022 third quarter, ending September 2022, represents an increase of 4.5% from the prior-year period. Furthermore, it has surpassed the consensus revenue estimates in three of the trailing four quarters, which is impressive.
The stock has gained 14.1% over the past five days to close the last trading session at $11.43.
BASFY’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
BASFY has a grade of A for Value and B for Stability. Within the A-rated Chemicals industry, it is ranked #17 of 89 stocks. Click here to see additional POWR Ratings (Quality, Growth, Sentiment, and Momentum) for BASFY.
Barclays PLC (BCS)
BCS offers various financial products and services in the United Kingdom, Europe, the Americas, Africa, the Middle East, and Asia. The company is headquartered in London, the United Kingdom. It operates through Barclays UK and Barclays International segments.
The company provides financial services, including retail banking, credit cards, investment banking, wealth management, and investment management services. In addition, it engages in securities dealing activities and issues credit cards.
BCS' total income increased 10.1% year-over-year to £6.50 billion ($7.79 billion) in the fiscal 2022 first quarter ended March 31, 2022. Its net operating income rose 8.7% year-over-year to £6.36 billion ($7.63 billion).
As of March 31, 2022, the company’s cash and balances at central banks came in at £264.92 billion ($317.65 billion), compared to £238.57 billion ($286.06 billion) as of December 31, 2021.
The $7.64 billion consensus revenue estimate for the fiscal 2022 second quarter (ended June 2022) represents a 1.4% improvement from the same period in 2021. The company has an impressive revenue surprise history as it has topped the consensus revenue in each of the trailing four quarters.
The stock has gained 11.1% over the past five days to close the last trading session at $7.73.
BCS’ strong fundamentals are reflected in its POWR Ratings. The stock has an overall grade of B, equating to a Buy in our proprietary rating system.
BCS has a grade of B for Value, Stability, and Momentum. Within the B-rated Foreign Banks industry, it is ranked #11 of 95 stocks. Click here to see additional POWR Ratings (Growth, Quality, and Sentiment) for BCS.
The Hershey Company (HSY)
HSY manufactures and sells confectionery products and pantry items in the United States and internationally. The company operates through three segments: North America Confectionery; North America Salty Snacks; and International. It markets and sells its products to wholesale distributors, chain drug stores, grocery stores, convenience stores, and department stores.
In May, HSY renewed its partnership with Team USA and joined the LA28 Olympic and Paralympic Games. The company will support Team USA through 2028 when the Games return to American soil and during Paris 2024 and Milan Cortina 2026. This partnership is expected to extend the company’s market reach and boost its growth and profitability.
In the same month, HSY opened its new R&D Center in Johor, Malaysia. This facility will enable HSY to quickly develop, test, and launch new products customized to consumers' preferences across the region. This investment is vital to the company’s strategy to drive international growth through innovation.
In the fiscal 2022 first quarter ended April 3, 2022, HSY's net sales increased 16.1% year-over-year to $2.67 billion. Its non-GAAP gross profit grew 16.3% year-over-year to $1.22 billion. Its non-GAAP operating profit stood at $707.89 million, up 27.4% year-over-year.
The company's non-GAAP net income and non-GAAP EPS came in at $523.47 million and $2.53, registering increases of 30.7% and 31.8% from the prior-year period, respectively.
Analysts expect HSY's revenue for the fiscal 2022 second quarter (ended June 2022) to come in at $2.23 billion, representing a 12.2% rise from the same period in 2021. Also, Street expects the company's EPS for the to-be-reported quarter to come in at $1.67, representing a growth of 13.8% year-over-year.
It’s no surprise that the company has surpassed the consensus revenue and EPS estimates in each of the trailing four quarters. HSY’s shares have gained 11.9% year-to-date and 20.4% over the past year to close the last trading session at $216.11.
HSY's POWR Ratings reflect a strong outlook. The stock has an overall rating of B, which translates to a Buy in our POWR Ratings system.
HSY has a grade of A for Quality and B for Sentiment and Growth. It is ranked #21 of 86 stocks in the B-rated Food Makers industry. Click here to see HSY's POWR Ratings for Stability, Value, and Momentum.
Marathon Petroleum Corporation (MPC)
MPC operates as an integrated downstream energy company mainly in the United States. The company operates in two segments: Refining & Marketing; and Midstream. It operates more than 7,160 jobber outlets in 37 states, the District of Columbia, and Mexico through independent entrepreneurs.
On June 14, MPC’s Transport and Rail (T&R) organization announced two new partnerships with the Women in Trucking Association (WIT) and the Women in Trucking Foundation.
“We have an opportunity to be more inclusive and continue to diversify our T&R team in many ways. This partnership is a great way to recruit women for all our T&R needs, including drivers, mechanics, accountants, schedulers, and leaders. This helps us to be better than the day before and elevate our game to compete as a top-tier company in the trucking industry,” said Katie Zalat, Director of Transport Operations West.
MPC's total revenues and other income increased 67.8% year-over-year to $38.38 billion in the fiscal 2022 first quarter ended March 31, 2022. Its income from continuing operations rose 690.8% from the year-ago value to $1.72 billion. Also, the company’s net income and net income per share came in at $1.17 billion and $1.50, up 1,731.3% and 505.4% year-over-year, respectively.
The $44.26 billion consensus revenue estimate for the fiscal 2022 second quarter (ended June 2022) represents a 48.4% improvement from the same period in 2021. Analysts expect MPC’s EPS for the to-be-reported quarter to increase 1,101.7% year-over-year to $8.05.
The company has surpassed the consensus revenue and EPS estimates in each of the trailing four quarters, which is impressive. The stock has gained 33.8% year-to-date and 72.7% over the past year to close the last trading session at $87.85.
MPC's POWR Ratings reflect a promising outlook. The stock has an overall grade of B, which equates to a Buy in our proprietary rating system.
MPC has a grade of A for Growth and Momentum. It has a B grade for Quality. Within the B-rated Energy - Oil & Gas industry, it is ranked #6 of 97 stocks. Click here to see additional POWR Ratings (Value, Stability, and Sentiment) for MPC.
BASFY shares were unchanged in after-hours trading Wednesday. Year-to-date, BASFY has declined -32.66%, versus a -16.27% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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