Concerns over the Federal Reserve's efforts to combat the multi-decade high inflation by policy tightening leading to a recession in the U.S. economy have led to a massive stock market sell-off lately. The S&P 500 is down 19% from its previous record on January 3. Many analysts believe that the index is in a bear market. According to a recent revelation from Deutsche Bank's chief U.S. equity and global strategist, Binky Chadha, S&P 500 could slide down to 3,000 if the economy falls into a recession in the near future, which would amount to an estimated 23% drop from the index's present level of around 3,900.
Moreover, the U.S. economy saw a 1.4% negative GDP in the first quarter of 2022, largely due to prolonged supply-side constraints, rising energy prices, and the war between Ukraine and Russia. Against this backdrop, investors could consider investing in stalwarts stocks, which represent well-established companies with solid cash flow and earnings growth and offer steady long-term gains.
The current market sell-off offers a great opportunity to bet on shares of stalwart companies Intel Corporation (INTC), AbbVie Inc. (ABBV), FedEx Corporation (FDX), Oracle Corporation (ORCL), and The Coca-Cola Company (KO), which possess solid growth attributes and could offer steady returns.
Intel Corporation (INTC)
INTC is engaged in the design, manufacture, and sale of computer products and technologies internationally and operates through CCG; DCG; IOTG; Mobileye; NSG; PSG; and All Other segments. It provides platform products, such as central processing units and chipsets, and non-platform or adjacent products, including accelerators, boards and systems, connectivity products, graphics, and memory and storage products.
This month, INTC announced advancements across silicon, software, and services, demonstrating how it brings together technologies and the ecosystem to unlock business value for customers today and in the future. Among the benefits mentioned across real-world examples are improved business results and insights, reduced total cost of ownership, increased time to market and value, and positive global impact.
In the first quarter ended April 2, 2022, the non-GAAP net revenue of INTC amounted to $18.40 billion. Its non-GAAP operating margin amounted to 23.1%, while its net income came in at $3.59 billion. The company's non-GAAP EPS amounted to $0.87.
INTC's trailing-12-months gross profit margin of 54.3% is 8% higher than the industry average of 50.3%. Its trailing-12-months EBIT Margin of 24.9% is 186.1% higher than the industry average of 8.7%.
Analysts expect INTC's revenue to increase 5.7% year-over-year to $19.11 billion in the third quarter ending September 2022. In addition, it has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in all of the trailing four quarters. The stock has declined 19.1% year-to-date.
INTC's POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to 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 B grade for Quality. Within the B-rated Semiconductor & Wireless Chip Industry, it is ranked #17 of 95 stocks.
To see additional POWR Ratings for INTC’s Growth, Sentiment, Stability, and Momentum, click here.
AbbVie Inc. (ABBV)
Headquartered in North Chicago, Illinois, ABBV discovers, develops, manufactures, and sells pharmaceuticals internationally. The company renders HUMIRA, a therapy used as an injection for autoimmune and intestinal Behçet's diseases; SKYRIZI to cure moderate to severe plaque psoriasis in adults; RINVOQ, a JAK inhibitor for the treatment of moderate to severely active rheumatoid arthritis in adult patients.
This month, ABBV announced an absolute worldwide license option agreement for CUG252, a potential best-in-class Treg-selective IL-2 mutein, along with novel IL-2 muteins, for the potential treatment of autoimmune and inflammatory diseases. Selective IL-2 muteins have the capacity to showcase a major advancement in the standard of care for patients with autoimmune and inflammatory diseases.
For the first quarter ending March 31, 2022, ABBV's net revenues increased 4.06% year-over-year to $13.54 billion. Its operating earnings improved 15% from its year-ago value to $4.72 billion, while its non-GAAP net income grew 9.3% from its prior-year quarter to $5.64 billion. The company's non-GAAP EPS increased 9.3% year-over-year to $3.16.
The consensus EPS estimate of $3.43 for the second quarter ending June 2022 represents a 10.4% year-over-year growth. Analysts expect revenue to increase 4.8% year-over-year to $14.63 billion for the same period. In addition, it has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in all of the trailing four quarters. The stock has plunged 3.6% over the past month. However, it has gained 11.5% year-to-date.
ABBV's trailing-12-months gross profit margin of 69.8% is 25.8% higher than the industry average of 55.5%. Its trailing-12-months EBIT Margin of 35.4% is 35469.9% higher than the industry average of 0.96%.
ABBV'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 Quality and a B for Sentiment and Growth. Within the Medical - Pharmaceuticals industry, it is ranked #4 of 167 stocks.
In total, we rate ABBV on eight different levels. Beyond what we've stated above, we have also given ABBV grades for Stability, Value, and Momentum. Get all the ABBV ratings here.
FedEx Corporation (FDX)
FDX offers transportation, e-commerce, and business services internationally. The company's FedEx Express segment offers express transportation, small-package ground delivery, and freight transportation services; the FedEx Ground segment provides day-certain delivery services to businesses and residences, whereas the FedEx Freight segment offers less-than-truckload freight transportation services.
This month, Aurora Innovation, Inc. (AUR) and FDX announced the augmentation of their pilot program to autonomously move FDX shipments on an additional commercial lane in Texas. Aurora's next-generation autonomous trucks based on the new Peterbilt 579 started to transport FDX shipments between Aurora's new terminals in Fort Worth and El Paso. Aurora is making the 600-mile trip on a weekly basis with safety drivers on board and expects to increase the frequency of trips in the coming months. Aurora continues to move shipments for FedEx between Aurora's South Dallas terminal and its new Houston terminal on a daily basis.
Also, last month eBay (EBAY), one of the leading online marketplaces, and FDX announced that Canadian sellers would be able to access FedEx shipping services directly through eBay Labels, a proprietary label printing solution. The unification of FedEx technology provides eBay sellers a seamless, on-platform experience to access FedEx domestic and international shipping tools and services – all at preferential rates.
For the third quarter ended February 28, 2022, FDX's total revenue increased 10% year-over-year to $23.64 billion. Its non-GAAP operating income grew 37.7% from its year-ago value to $1.46 billion, while its non-GAAP net income improved 30% year-over-year to $1.22 billion. The company's non-GAAP EPS rose 32.3% from its prior-year quarter to $4.59.
FDX's trailing-12-months cash from operations of $9.07 billion is 4985.8% higher than the industry average of $178.4 million. Its trailing-12-months ROC of 8.4% is 16.5% higher than the industry average of 7.2%.
Analysts expect FDX's revenue to increase 8.5% year-over-year to $24.53 billion for the fourth quarter ending May 2022. The consensus EPS estimate of $6.85 for the fourth quarter ending May 2022 represents a 36.6% improvement year-over-year.
FDX'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 a B grade for Growth, Value, and Quality. In the B-rated Air Freight & Shipping Services industry, it is ranked #4 of 17 stocks.
In total, we rate FDX on eight different levels. Beyond what we've stated above, we have also given FDX grades for Stability, Momentum, and Sentiment. Get all the FDX ratings here.
Oracle Corporation (ORCL)
Headquartered in Austin, Texas, ORCL offers products and services that address enterprise information technology environments internationally. Its Oracle cloud software as a service offering includes various cloud software applications, including Oracle Fusion cloud enterprise resource planning (ERP), Oracle Fusion cloud enterprise performance management, Oracle Fusion cloud supply chain, and manufacturing management.
This month, Diebold Nixdorf, one of the leaders in enabling connected commerce, has executed Oracle Fusion Cloud Human Capital Management (HCM) to replace its network of local HR systems on a single platform. With Oracle Cloud HCM, the company's HR team will be able to function more efficiently and gain deeper insights into its global workforce, which includes more than 20,000 employees and has a presence in more than 100 countries.
Last month, ORCL opened the doors to its new 30,000square-foot Oracle Industry Lab just outside of Chicago, Illinois. The working lab gives customers a hands-on environment to create new ideas and develop solutions leveraging technology from Oracle and more than 30 industry partners. The lab will first emphasize the energy and water, construction and engineering, communications, and manufacturing industries backed by Verizon 5G Ultra Wideband. Later this year, Oracle will open a new sustainability and mobility-centered lab in Reading, England, and a construction industry-focused lab in Sydney, Australia.
ORCL's revenue increased 4% year-over-year to $10.51 billion for the third quarter ending February 28, 2022. Its operating income amounted to $3.82 billion, while its net income came in at $2.32 billion. The company's EPS stood at $0.84.
The consensus EPS estimate of $1.13 for the first quarter ending August 2022 represents 9.3% year-over-year growth. Analysts expect ORCL's revenue to increase 4.1% year-over-year to $11.69 for the first quarter ending May 2022. In addition, it has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in three of the trailing four quarters. The stock has plunged 21.3% year-to-date.
ORCL's trailing-12-months gross profit margin of 79.4% is 57.8% higher than the industry average of 50.3%. Its trailing-12-months EBIT Margin of 37.9% is 336.7% higher than the industry average of 8.69%.
It is no surprise that ORCL has an overall B rating, equating to Buy in our POWR Ratings system. ORCL has a B grade for Value, Stability, and Quality. In the Software - Application industry, it is ranked #15 of 156 stocks.
Click here to see the additional POWR Ratings for ORCL (Growth, Momentum, and Sentiment).
The Coca-Cola Company (KO)
KO is a beverage company that manufactures, markets, and sells various nonalcoholic beverages internationally. The company offers sparkling soft drinks; flavored and enhanced water and sports drinks; juice, dairy, plant-based beverages; tea and coffee; and energy drinks.
In the first quarter ending April 1, 2022, KO's net operating revenues increased 16% year-over-year to $10.49 billion. Its operating income grew 25% from its year-ago value to $3.41 billion, while its net income amounted to $2.78 billion, up 24% from its prior-year quarter. The company's EPS rose 23% year-over-year to $0.64.
KO's trailing-12-months gross profit margin of 60.3% is 74% higher than the industry average of 34.6%. Its trailing-12-months EBIT Margin of 29.7% is 240.8% higher than the industry average of 8.7%.
Analysts expect KO's revenue to increase 4.2% year-over-year to $10.55 billion for the second quarter ending June 2022. The company's EPS is expected to grow 2.5% year-over-year to $0.67 in the third quarter ending September 2022. Moreover, it has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in all of the trailing four quarters. The company's shares have declined 7.6% over the past month. However, it has soared 11.6% over the past year.
KO'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 a B grade for Quality, Sentiment, and Stability. Within the B-rated Beverages industry, it is ranked #15 of 35 stocks.
In total, we rate KO on eight different levels. Beyond what we've stated above, we have also given KO grades for Growth, Value, and Momentum. Get all the KO ratings here.
INTC shares were trading at $41.93 per share on Monday afternoon, up $0.28 (+0.67%). Year-to-date, INTC has declined -17.31%, versus a -16.41% 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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