The major stock market indexes have witnessed heightened volatility since the beginning of the year due to soaring inflation, the Fed’s tightening monetary policy, supply chain disruptions, and the geopolitical tensions surrounding Ukraine and Russia. In the last trading session, Dow Jones fell 0.8%, while the Nasdaq composite and S&P 500 dropped 0.7% and 1.1%, respectively. According to CNBC’s Jim Cramer, the stock market is worried that skyrocketing oil prices, which reached their 13-week high on Wednesday, might cause a recession in the economy.
Amid the current market volatility, companies providing durable products tend to remain resilient. According to the Census Bureau, new orders for manufactured durable goods increased by $1.2 billion, or 0.4%, to $265.3 billion in April.
So, fundamentally sound durable stocks Johnson & Johnson (JNJ), Coca-Cola FEMSA, S.A.B. de C.V. (KOF), Marubeni Corporation (MARUY), Novartis AG (NVS), and Weis Markets, Inc. (WMK), which offer solid stability, could be great picks for your portfolio now. These stocks are rated Strong Buy or Buy in our proprietary rating system and possess an A grade for stability.
Johnson & Johnson (JNJ)
JNJ, along with its subsidiaries, researches and develops, manufactures and sells various products in the healthcare field worldwide. The company's Consumer Health segment provides baby care products under the JOHNSON'S and AVEENO Baby brands; oral care products under the LISTERINE brand; skin health/beauty products.
In April, Bioasis Technologies Inc. (BIOAF) announced a research collaboration with Janssen Pharmaceuticals, a subsidiary of JNJ. Under this agreement, Bioasis will allow access to its xB3 platform to Janssen in order for the latter to research, build and commercialize new products. Moreover, Bioasis will execute the work on behalf of Janssen in a cost-plus type arrangement.
Also, in April, JNJ announced the launch of the J&J Satellite Center for Global Health Discovery (Satellite Center) at the Holistic Drug Discovery and Development (H3D) Centre, University of Cape Town, in Cape Town, South Africa. This is the latest expansion of the J&J Centers for Global Health Discovery (J&J Centers), a global network of research partnerships between the company and leading research institutions to increase translational and discovery research to take up some of the world's most pressing global health challenges.
JNJ’s sales to customers increased 5% year-over-year to $23.43 billion for the first quarter of fiscal 2022. Its gross profit grew 3.7% from its year-ago value to $15.83 billion, while its net earnings amounted to $5.15 billion. The company’s EPS came in at $1.93 over the period.
Analysts expect JNJ’s revenue to increase 2.6% year-over-year to $23.92 billion for the second quarter ending June 2022. The consensus EPS estimate of $2.58 represents a 3.9% improvement year-over-year for the second quarter ending June 2022. Moreover, it has an impressive earnings surprise history, surpassing the consensus EPS estimates in all of the trailing four quarters. The stock has gained 4.3% year-to-date and 9.2% over the past nine months.
JNJ's POWR Ratings reflect this promising outlook. The company has an overall rating of A, which 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 Stability and a B for Quality. Within the Medical - Pharmaceuticals industry, it is ranked #6 of 168 stocks. To see additional POWR Ratings for Value, Growth, Sentiment, and Momentum for JNJ, click here.
Coca-Cola FEMSA, S.A.B. de C.V. (KOF)
Headquartered in Mexico City, Mexico. KOF is a subsidiary of Fomento Economico Mexicano, S.A.B. de C.V., and is a franchise bottler that produces, markets, sells and distributes Coca-Cola trademark beverages. The company offers sparkling beverages, including colas, flavored sparkling beverages; and waters and other beverages.
During the first quarter ending March 2022, KOF’s total revenues increased 14.6% year-over-year to MXN$51.20 billion ($2.61 billion). The operating income grew 16% from its prior-year quarter to MXN$6.844 billion ($349.04 million), while its net income came in at MXN$2.89 billion ($147.59 million). For the three months ended March 2022, the cash and cash equivalents and marketable securities came in at MXN$49.44 billion ($2.52 billion), up 5% from its previous period.
The consensus EPS estimate of $0.86 for the second quarter ending June 2022 represents an 8.9% year-over-year growth. Analysts expect revenue to increase 4.6% year-over-year to $2.50 billion for the second quarter ending June 2022. In addition, it has an impressive earnings surprise history, surpassing the consensus EPS estimates in three of the trailing four quarters. The stock has gained 12.3% over the past year.
KOF's strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The stock also has an A grade for Stability and a B for Quality and Value. Within the A-rated Beverages industry, it is ranked #1 of 34 stocks.
In total, we rate KOF on eight different levels. Beyond what we've stated above, we have also given KOF grades for Sentiment, Growth, and Momentum. Get all the KOF ratings here.
Marubeni Corporation (MARUY)
Headquartered in Tokyo, Japan, MARUY engages in various business activities worldwide. The company trades in grains, feed ingredients, compound feeds, foods, agricultural and marine products, processed seafood, and fresh and processed meat; and apparel, footwear, lifestyle, and textile and industrial materials.
For the fiscal year ended March 31, 2022, MARUY's total revenue increased 34.4% year-over-year to ¥8508.59 billion ($433.94 billion). Its operating profit grew 101% from its year-ago value to ¥284.49 billion ($14.51 billion), while its profit for the period improved 88.3% from its prior-year quarter to ¥434.95 billion ($22.18 billion). The company’s EPS rose 92.2% year-over-year to ¥242.44.
The consensus EPS estimate of $24.85 for fiscal 2023 represents 33.4% year-over-year growth. Analysts expect revenue to increase 357.9% year-over-year to $61.58 billion for fiscal 2023. The company's shares have surged 11.1% year-to-date and 27.8% over the past nine months.
MARUY's strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. The stock also has an A grade for Value and Stability and a B grade for Sentiment. In the Industrial - Metals industry, it is ranked #4 of 37 stocks.
In total, we rate MARUY on eight different levels. Beyond what we've stated above, we have also given MARUY grades for Quality, Growth, and Momentum. Get all the MARUY ratings here.
Novartis AG (NVS)
Headquartered in Basel, Switzerland, researches, develops, manufactures, and markets healthcare products internationally. The company operates through two segments, Innovative Medicines, which offers prescription medicines for patients and healthcare providers, and Sandoz develops, manufactures, and markets finished dosage form medicines.
Recently, NVS announced longer-term follow-up data from the Phase III ASCEMBL trial for patients with Philadelphia chromosome-positive chronic myeloid leukemia in chronic phase (Ph+ CML-CP) previously cured with two or more tyrosine kinase inhibitors (TKIs), presented at the 2022 American Society of Clinical Oncology (ASCO) Annual Meeting.
Also, recently, Tafinlar (dabrafenib) + Mekinist (trametinib) considerably improved their efficiency in patients ages 1 to 17 years old with BRAF V600 pediatric low-grade glioma (pLGG) requiring first systemic treatment compared to chemotherapy, the current standard-of-care for these patients.
Last month, NVS announced that the U.S. Food and Drug Administration (FDA) had granted accelerated approval for Kymriah (tisagenlecleucel) for the treatment of adult patients with relapsed or refractory (r/r) follicular lymphoma (FL) after two or more lines of systemic therapy. According to the Accelerated Approval Program, continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trial(s). Kymriah is now FDA approved in three indications and remains the only CAR-T cell therapy approved in both adult and pediatric settings1.
In the first quarter ending of the fiscal year 2022, NVS’ sales increased 1% year-over-year to $12.53 billion. Its operating income grew 18% from its year-ago value to $2.85 billion, while its net income improved 23% from its prior-year quarter to $2.23 billion. The company’s EPS increased 25% year-over-year to $1.00.
Analysts expect NVS’ revenue to increase 1.2% year-over-year to $13.18 billion for the third quarter ending September 2022. The company's EPS is expected to grow 4.1% year-over-year to $1.46 in the fourth quarter ending December 2022. The company's shares have gained 9% over the past three months.
Unsurprisingly, NVS has an overall A rating, equating to Strong Buy in our POWR Ratings system. NVS has an A grade for Stability and a B grade for Value and Quality. In the Medical - Pharmaceuticals industry, it is ranked #2 of 168 stocks
Click here to see the additional POWR Ratings for NVS (Growth, Momentum, and Sentiment).
Weis Markets, Inc. (WMK)
Headquartered in Sunbury, Pennsylvania, WMK is involved in the retail sale of food through a chain of supermarkets in Pennsylvania and surrounding states. The company's retail food stores sell groceries, dairy products, frozen foods, meats, seafood, fresh produce, floral, pharmacy services, deli products, prepared foods, bakery products, beer and wine, fuel; and general merchandise items.
For the first quarter ending March 26, 2022, WMK’s net sales increased 9.7% year-over-year to $1.10 billion. Its income from operations improved 30.1% from its year-ago value to $41.41 million, while its net income came in at $31.39 million, up 29.4% from its year-ago value. The company’s EPS rose 0.3% year-over-year to $1.17.
The $1.40 consensus EPS estimate represents a 10.3% improvement year-over-year for the second quarter ending June 2022. Analysts expect WMK's revenue to increase 8.1% year-over-year to $4.84 billion for the second quarter ending June 2022. The stock has gained 13.5% year-to-date.
WMK's strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The stock also has an A grade for Stability and a B grade for Growth and Quality. In the Grocery/Big Box Retailers industry, it is ranked #6 of 37 stocks.
In total, we rate WMK on eight different levels. Beyond what we've stated above, we have also given WMK grades for Sentiment, Value, and Momentum. Get all the WMK ratings here.
JNJ shares were unchanged in after-hours trading Monday. Year-to-date, JNJ has gained 1.13%, versus a -20.80% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.
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