The Federal Reserve announced a 75 basis-point rate hike last week, the largest in 28 years, to combat the rising inflation. Moreover, Goldman Sachs expects another 75 bps hike in July. The market volatility is evident from the CBOE Volatility Index’s 83% year-to-date gains. The S&P 500 is down 22.9% year-to-date.
According to the Conference Board, 60% of CEOs expect the economy to contract in the next year and a half. Furthermore, JPMorgan’s Michael Feroli expects Powell to be “largely successful” yet considers recession distinct possibility.
Therefore, we think dividend aristocrats Abbott Laboratories (ABT), AbbVie Inc. (ABBV), Genuine Parts Company (GPC), Johnson & Johnson (JNJ), and Sysco Corporation (SYY), which have an impressive record of raising their dividends, could be solid investments now to navigate the market fluctuations. These stocks are rated Strong Buy in our POWR Ratings system.
Abbott Laboratories (ABT)
ABT and its subsidiaries discover, develop, manufacture, and sell health care products worldwide. It operates in four segments: Established Pharmaceutical Products; Diagnostic Products; Nutritional Products; and Medical Devices.
On May 31, 2022, the U.S. Food and Drug Administration (FDA) cleared ABT’s next-generation FreeStyle Libre 3 system for four years and older diabetics. This device offers highly accurate results with sheer convenience, and its affordability is expected to make it a game-changing discovery for regular glucose-level maintenance of diabetics.
ABT has increased its dividend payouts for 50 straight years. Over the last three years, ABT’s dividend payouts have grown at a 15.3% CAGR. While ABT’s four-year average dividend yield is 1.48%, its current dividend translates to a 1.83% yield.
ABT’s net sales came in at $11.89 billion for the first quarter ended March 31, 2022, up 13.8% year-over-year. The company’s net earnings came in at $2.45 billion, up 36.5% year-over-year. Also, its EPS came in at $1.37, up 37% year-over-year.
For the quarter ended June 2022, analysts expect ABT’s revenue to increase 5.7% year-over-year to $10.25 billion. Its EPS is estimated to grow 12.6% per annum for the next five years. It surpassed EPS estimates in each of the trailing four quarters. The stock closed Friday’s trading session at $102.53.
ABT’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
ABT has an A grade for Growth and a B grade for Stability, Sentiment, and Quality. Within the Medical - Devices & Equipment industry, it is ranked #2 out of 147 stocks. Click here for the additional POWR Ratings for Value and Momentum for ABT.
AbbVie Inc. (ABBV)
ABBV discovers, develops, manufactures, and sells pharmaceuticals worldwide. The company’s key therapeutic areas are immunology, oncology, neuroscience, eye care, virology, and gastroenterology- in addition to its products and services across the Allergan Aesthetics portfolio.
On June 17, 2022, ABBV’s SKYRIZI® (risankizumab-rzaa) got approved as the first and only specific interleukin-23 (IL-23) inhibitor by the U.S. Food and Drug Administration (FDA) for the treatment of adults with moderate to severe Crohn’s disease.
This product has reduced symptoms efficiently in patients with Crohn’s disease and is expected to be a solid addition to the company’s product portfolio.
ABBV has increased its dividend payouts for 50 straight years. Over the last five years, ABBV’s dividend payouts have grown at a 17.5% CAGR. While ABBV’s four-year average dividend yield is 4.62%, its current dividend translates to a 4.08% yield.
ABBV’s net revenues came in at $13.54 billion, up 4.1% year-over-year, while its operating earnings increased 15% year-over-year to $4.72 billion for the first quarter ended March 31, 2022. Its non-GAAP adjusted earnings after tax came in at $5.64 billion, up 9.3% year-over-year. Also, its non-GAAP adjusted EPS came in at $3.16, up 9.3% year-over-year.
For fiscal 2022, analysts expect ABBV’s revenue to be $59.63 billion, representing a 6.2% year-over-year rise. In addition, the company’s EPS is expected to grow 10.3% from the year-ago value to $14.01 in 2022. It surpassed EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 20.4% to close Friday’s trading session at $138.28.
ABBV has an overall A rating, equating to a Strong Buy in our POWR Ratings system.
Also, the stock has an A grade for Quality and a B for Growth and Sentiment. Within the Medical - Pharmaceuticals industry, it is ranked #4 out of 167 stocks. Click here for the additional POWR Ratings for Value, Momentum, and Stability for ABBV.
Genuine Parts Company (GPC)
GPC distributes automotive replacement parts and industrial parts and materials. It operates through the Automotive Parts Group and Industrial Parts Group segments. The company serves global customers from an extensive network of more than 10,000 locations in 17 countries.
On April 21, 2022, Paul Donahue, Chairman, and CEO, said, “We believe GPC is well-positioned with the financial strength and flexibility to support our growth plans and provide for disciplined, value-creating capital allocation while enhancing shareholder value.”
GPC has increased its dividend payouts for 66 consecutive years. GPC’s dividend payouts have grown at a 4.9% CAGR over the last three years and a CAGR of 5.1% over the past five years. While GPC’s four-year average dividend yield is 2.97%, its current dividend translates to a 2.81% yield.
For the fiscal 2022 first quarter ended March 31, 2022, GPC’s net sales came in at $5.29 billion, up 18.6% year-over-year. Its net income came in at $245.84 million, up 12.9% year-over-year, while its EPS came in at $1.72, up 14.7% year-over-year.
GPC’s revenue is expected to come in at $21.17 billion in 2022, representing a 12.2% year-over-year rise. The company’s EPS is expected to increase 13.3% year-over-year to $7.83 in 2022. It surpassed EPS estimates in each of the four trailing quarters. Over the past year, the stock has gained 3.5% to close Friday’s trading session at $127.22.
It’s no surprise that GPC has an overall A rating, equating to a Strong Buy in our proprietary rating system. In addition, it has an A grade for Growth and a B for Stability, Sentiment, and Quality.
GPC is ranked #2 out of 68 stocks in the B-rated Auto Parts industry. Click here to see the additional POWR Ratings for GPC (Value and Momentum).
Johnson & Johnson (JNJ)
JNJ and its subsidiaries research, develop, manufacture & sell a range of products in the health care field worldwide. It operates through three segments: Consumer Health; Pharmaceutical; and MedTech.
On April 25, 2022, JNJ announced the launch of the J&J Satellite Center for Global Health Discovery (Satellite Center) at the Holistic Drug Discovery and Development Centre, University of Cape Town, in Cape Town, South Africa. This collaboration aims to eradicate the emerging threat of antimicrobial resistance with a specific focus on multidrug-resistant Gram-negative bacteria.
JNJ has increased its dividend payouts for 60 straight years. The four-year average dividend yield for JNJ is 2.60%, and its current dividend translates to a 2.67% yield. Also, its dividend payouts have grown at a CAGR of 5.9% over the past five years.
JNJ’s reported sales increased 5% year-over-year to $23.43 billion in the fiscal 2022 first quarter. Its adjusted net earnings came in at $7.13 billion, up 3% year-over-year, while its adjusted EPS came in at $2.67, up 3.1% year-over-year.
Analysts expect JNJ’s revenue and EPS to increase 3.8% and 6% year-over-year to $100.14 billion and $10.89, respectively, in fiscal 2023. In addition, it has surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 2.6% to close Friday’s trading session at $169.46.
JNJ has an overall A rating, which indicates a Strong Buy in our proprietary rating system.
JNJ has an A grade for Stability and a B grade for Quality. Within the Medical - Pharmaceuticals industry, it is ranked #13 out of 167 stocks. Click here for the additional POWR Ratings for Growth, Value, Momentum, and Sentiment for JNJ.
Sysco Corporation (SYY)
SYY and its subsidiaries distribute various food and related products primarily to the food service or food-away-from-home industry in the United States, Canada, the United Kingdom, France, and internationally. It operates through U.S. Foodservice Operations; International Foodservice Operations; SYGMA; and Other segments.
On May 19, 2022, SYY and Daimler Truck North America, the leading North American heavy-duty truck manufacturer, jointly announced a Letter of Intent to deploy up to nearly 800 battery-electric Freightliner eCascadia Class 8 tractors serving Sysco customers by 2026.
This joint investment is futuristic and aims to reduce direct carbon emissions by 27.5% by 2030, aligning with the company’s sustainability goals.
SYY has increased its dividend payouts for 42 straight years. SYY’s dividend payouts have grown at an 8% CAGR over the past five years. Its four-year average yield is 2.37%, while its current dividend yield is 2.49%.
SYY’s sales increased 42.9% year-over-year to $16.90 billion for the third quarter ended April 2, 2022. Its non-GAAP net earnings came in at $362.91 million, up 216.1% year-over-year, while its non-GAAP EPS came in at $0.71, up 222.7% year-over-year.
Analysts expect SYY’s revenue to increase 32.7% year-over-year to $68.08 billion in 2022. Its EPS is estimated to increase 123.6% from the year-ago value to $3.22 in 2022. The stock has gained 3.6% over the past year to close Friday’s trading session at $78.77.
SYY has an overall A grade equating to a Strong Buy in our POWR Ratings system. It has an A grade for Growth and a B for Value and Sentiment. Click here to see the additional POWR Ratings for SYY (Momentum, Stability, and Quality). It is ranked #6 out of 86 stocks in the B-rated Food Makers industry.
ABT shares were trading at $102.53 per share on Monday afternoon, up $0.46 (+0.45%). Year-to-date, ABT has declined -26.60%, versus a -22.73% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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