The recently released jobs data revealed that the unemployment rate fell to 3.5% last month from 3.7% in August, matching a half-century low that was last reached in July. The employment data seems to have paved the way for the Federal Reserve to respond with a further major interest rate hike next month.
With borrowing costs set to increase further, a soft landing for the economy looks unlikely. All the major indexes have responded with steep declines, led by the Nasdaq, which touched its lowest close yesterday since July 2020.
JP Morgan Chase CEO Jamie Dimon recently pointed out that a “very, very serious” mix of headwinds was likely to tip the United States and the global economy into recession by the middle of next year.
Given the market uncertainties, shares of fundamentally solid and profitable businesses, Bristol-Myers Squibb Company (BMY), Energy Transfer LP (ET), Crane Holdings, Co. (CR), and J.Jill, Inc. (JILL), might be ideal investments now.
Bristol-Myers Squibb Company (BMY)
BMY discovers, develops, manufactures, and markets biopharmaceutical products globally. The company offers solutions for hematology, oncology, cardiovascular, immunology, fibrotic, neuroscience, and Covid-19 diseases.
On September 16, BMY received approval from European Commission for LAG-3-Blocking Antibody Combination, Opdualag (nivolumab and relatlimab), for the treatment of unresectable or metastatic melanoma with tumor cell PD-L1 Expression < 1%. This approval would enable the treatment of all adults and adolescents above 12 years of age in all European Union member states, as well as Iceland, Liechtenstein, and Norway.
On September 15, BMY announced adjuvant treatment with Opdivo (nivolumab) demonstrated a statistically significant and clinically meaningful improvement in recurrence-free survival (rfs) in patients with Stage IIB/C Melanoma in the CheckMate -76K Trial.
Furthermore, the company declared a quarterly dividend of $0.54 per share, which would be paid out on November 1. It pays a $2.16 per share dividend annually, which translates to a 3.15% yield on the current price. The company’s dividends have grown at a CAGR of 6.7% over the past five years.
For the second quarter of fiscal 2022 ended June 30, BMY’s revenue increased 1.6% year-over-year to $11.89 billion. During the same period, net earnings attributable to BMY increased 34.7% year-over-year to $1.42 million, while its EPS increased 18.4% year-over-year to $1.93.
Analysts expect BMY’s revenue for the fiscal year (ending December 2023) to increase 3.4% year-over-year to $47.70 billion. The company’s EPS for the next year is expected to grow 6.6% from the previous year to $8.01. Moreover, BMY has an impressive earnings surprise history, as it has topped the consensus EPS estimates in each of the trailing four quarters.
BMY’s stock has gained 10.7% year-to-date to close the last trading session at $68.48.
BMY’s POWR Ratings reflect this promising outlook. The company’s overall A rating translates to Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock also has an A grade for Value and a grade B for Growth, Sentiment, and Quality. It tops the list of 163 stocks in the Medical – Pharmaceuticals industry.
To see additional POWR Ratings for Stability, and Momentum for BMY, click here.
Energy Transfer LP (ET)
ET owns and operates a portfolio of energy assets in the United States. The company sells natural gas to electric utilities, independent power plants, local distribution, and industrial end-users.
On August 24, ET announced that its subsidiary, Energy Transfer LNG Export, LLC, has entered into a 20-year LNG Sale and Purchase Agreement (SPA) with Shell NA LNG LLC related to its Lake Charles LNG project. Under the agreement, Energy Transfer LNG will supply Shell with 2.1 million tonnes of LNG per annum (mtpa). This SPA is expected to boost the company’s revenue streams.
On August 16, ET announced the completion of the sale of its 51% interest in Energy Transfer Canada ULC (Energy Transfer Canada). The company expects the sale of these assets would allow it to deleverage its balance sheet further and redeploy capital within its footprint across the United States.
On July 26, ET declared a quarterly dividend of $0.23 per share, paid out on August 19. The company pays $0.92 as a dividend annually. This translates to a yield of 8.11% on the current price. The 4-year average yield stands at an impressive 10.45%. The company’s dividends have grown at 10.7% CAGR over the last ten years.
During the fiscal 2022 second quarter ended June 30, ET’s revenue increased 71.8% year-over-year to $25.95 billion. Its operating income grew 32.3% year-over-year to $2.11 billion. The company’s adjusted EBITDA amounted to $3.23 billion, up 23.4% year-over-year.
Furthermore, the company’s net income attributable to partners and net income per common unit came in at $1.33 billion and $0.39, registering increases of 111.8% and 95% from the prior-year period, respectively.
Analysts expect ET’s revenue for the third quarter of the fiscal year ended September 2022 to come in at $23.96 billion, representing an increase of 43.8% from the previous-year quarter. The company’s consensus EPS estimate of $0.37 for the same quarter indicates an 85% year-over-year increase. The company has surpassed the consensus revenue estimates in three of the trailing four quarters.
The stock has gained 30.2% year-to-date to close the last trading session at $11.34.
ET has a B overall rating, which equates to a Buy in our POWR Ratings system. It has an A grade for Momentum and a B grade for Value.
ET is ranked #35 among 94 stocks in the B-rated Energy-Oil & Gas industry.
Beyond what has been discussed above, we have also given ET grades for Sentiment, Growth, Quality, and Stability. Get access to all ET ratings here.
Crane Holdings, Co. (CR)
CR is a diversified manufacturer of engineered industrial products. The company operates through three segments: Aerospace & Electronics; Process Flow Technologies; and Payment & Merchandising Technologies.
On September 26, CR announced its regular quarterly dividend of $0.47 per share for the fourth quarter of 2022, to be paid on December 14, 2022. The company pays $1.88 annually as dividends, which translates to a yield of 2% at the current share price. Its 4-year average dividend yield is 2.10%. CR’s dividends have grown at a 6.6% CAGR over the past three years.
On August 15, CR announced the sale of a subsidiary holding all asbestos liabilities and related insurance assets. This divestiture is expected to increase the strength of the balance sheet and free cash flows due to the removal of asbestos-related liabilities and the elimination of related payment obligations.
In June, CR announced the completion of the previously announced divestiture of Crane Supply. This is expected to free up capital to be deployed for greater focus on and value creation through core businesses.
For the fiscal year 2022 second quarter ended June 30, CR’s net sales increased 1% year-over-year to $864.30 million. The company’s net income attributable to common shareholders grew 102.8% from the year-ago value to $280.50 million, while its earnings per share came in at $4.93, up 111.6% year-over-year.
CR’s revenues for fiscal 2022 and 2023 are expected to increase 6.8% and 3.1% year-over-year to $3.4 billion and $3.5 billion, respectively. The company’s EPS for fiscal 2022 and 2023 are expected to increase 17.5% and 7% year-over-year to $7.70 and $8.24, respectively. It has surpassed Street EPS estimates in each of the trailing four quarters.
Shares of CR have gained 2.3% over the past year to close the last trading session at $94.23.
CR's strength and promising outlook are reflected in an overall rating of A, equating to a Strong Buy in our POWR Ratings system. It also has an A grade for Quality and grade B for Value, Stability, and Sentiment.
CR tops the list of 79 stocks in the B-rated Industrial – Machinery industry. Click here to access CR’s ratings for Growth and Momentum.
J.Jill, Inc. (JILL)
JILL is an omnichannel retailer of women’s apparel. The company’s flagship brand J.Jill is focused on clothing for women in the 45-age segment. It offers two sub-brands extensions of its brand aesthetic: Pure Jill and Wearever.
For the second quarter of fiscal 2022 ended July 30, JILL’s net sales increased marginally year-over-year to $160.34 million, while its adjusted income from operations increased 16.8% year-over-year to $28.19 million. The company’s adjusted EBITDA and net income grew 8.8% and 34.6% year-over-year to $35.57 million and $17.69 million, respectively.
As a result, JLL’s adjusted quarterly net income per share increased 33.3% year-over-year to $1.24.
Analysts expect JILL’s revenue and EPS for the current fiscal year ending January 2023 to increase 4% and 26.8% year-over-year to $608.8 million and $2.7, respectively. The company has an impressive earnings surprise history of surpassing its consensus EPS estimates in each of the trailing four quarters.
JLL’s stock has gained 13.5% in the past six months to close the last trading session at $16.78.
It is no surprise that JILL has an overall rating of A, which translates to Strong Buy in our POWR Ratings system. JILL also has an A grade for Sentiment and Quality and a B for Value.
JILL is ranked #2 out of 67 stocks in the Fashion & Luxury industry.
Beyond what we’ve stated above, we have also given JILL grades for Growth, Momentum, and Stability. Get all JILL ratings here.
BMY shares were trading at $69.84 per share on Tuesday afternoon, up $1.36 (+1.99%). Year-to-date, BMY has gained 15.49%, versus a -23.52% rise in the benchmark S&P 500 index during the same period.
About the Author: Santanu Roy
Having been fascinated by the traditional and evolving factors that affect investment decisions, Santanu decided to pursue a career as an investment analyst. Prior to his switch to investment research, he was a process associate at Cognizant. With a master's degree in business administration and a fundamental approach to analyzing businesses, he aims to help retail investors identify the best long-term investment opportunities.
4 Stocks to Help You Beat the Market StockNews.com
