Despite making a remarkable comeback in July and early August, the benchmark S&P 500 Index is still down 15% year to date. Last week, the S&P 500, Nasdaq Composite, and the Dow Jones Industrial Average declined 4%, 4.4%, and 4.2%, respectively, erasing all of their gains in August.
The Fed Chair Jerome Powell’s speech at the central bank's annual economic symposium in Jackson Hole triggered a significant market sell-off on Friday. Powell said that the central bank’s job of lowering inflation is not yet done, suggesting that the Fed will continue aggressively raising interest rates.
Moreover, Democratic Senator Elizabeth Warren said that she was worried that the Federal Reserve could tip the nation's economy into recession and that interest rate hikes would put people out of work.
Since the market is expected to remain under pressure in the upcoming months, investors planning their retirement finances may consider investing in relatively stable stocks Bristol-Myers Squibb Company (BMY), Costco Wholesale Corporation (COST), and Waste Management, Inc. (WM), which pays reliable dividends.
Bristol-Myers Squibb Company (BMY)
BMY discovers, develops, licenses, manufactures, and markets biopharmaceutical products worldwide. It offers products for hematology, oncology, cardiovascular, immunology, fibrotic, neuroscience, and Covid-19 diseases. The stock has a beta of 0.39.
This month, BMY announced the completion of its acquisition of Turning Point Therapeutics, Inc., in an all-cash transaction. With the completion of the acquisition, Turning Point shares have ceased trading on the NASDAQ Global Select Market, and Turning Point is now a wholly owned subsidiary of Bristol Myers Squibb.
Also, BMY recently announced positive topline results from KarMMa-3, a Phase 3, global, randomized, multicenter, open-label study evaluating Abecma (idecabtagene vicleucel) compared to standard combination regimens in adults with multiple myeloma that is relapsed and refractory after two to four prior lines of therapy and refractory to the last regimen.
BMY paid a quarterly dividend of $0.54 on August 1, 2022. BMY’s $2.16 annual dividend yields 3.03% at the current share price. Also, it has a four-year average dividend yield of 3.03%. Its dividend payouts have increased at a 6.4% CAGR over the past five years.
For the second quarter ending June 30, 2022, BMY’s revenue increased 1.6% year-over-year to $11.89 billion. Its net earnings increased 34.7% year-over-year to $1.43 million, while its EPS remained flat year-over-year at $1.93.
The $2.10 consensus EPS estimate for the first quarter ending March 2023 represents 7% year-over-year growth. Analysts expect revenue to increase 1% year-over-year to $11.76 billion for the first quarter ending March 2023. Moreover, it has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in three of the trailing four quarters. The company's shares have surged 14.2% year-to-date and 25.9% over the past nine months.
BMY’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 Value and a B for Growth and Sentiment. Within the Medical – Pharmaceuticals industry, it is ranked #3 of 167 stocks.
To see additional POWR Ratings for Quality, Stability, and Momentum for BMY, click here.
Costco Wholesale Corporation (COST)
COST is involved in the operation of membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Korea, Australia, Spain, France, Iceland, China, and Taiwan. It offers branded and private-label products in a range of merchandise categories. COST has a 0.68 beta.
Last month, COST completed a purchase for $1.05 billion by a wholly-owned subsidiary of the 45% minority interest in Costco-Taiwan, a joint venture, from their long-time joint venture partners. The company now indirectly owns all of Costco Taiwan. The company has estimated that the purchase will be approximately one to one and one-half percent accretive to earnings per share.
COST paid a quarterly dividend of $0.90 on August 12, 2022. COST’s $3.60 annual dividend yields 0.68% at the current share price. Also, it has a four-year average dividend yield of 1.45%. Its dividend payouts have increased at a 12.8% CAGR over the past five years.
For the third quarter ending May 8, 2022, COST's total revenue increased 16.2% year-over-year to $52.6 billion. Its operating income improved 7.7% from its year-ago value to $1.79 billion, while its net income grew 10.9% year-over-year to $1.35 billion. The company's EPS increased 15.3% from its prior-year quarter to $3.17.
Analysts expect COST's revenue to increase 14.2% year-over-year to $71.55 billion for the fourth quarter ending August 2022. The consensus EPS estimate of $4.16 represents a 6.6% improvement year-over-year for the fourth quarter ending August 2022. Moreover, it has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in each of the trailing four quarters. The stock has gained 14.4% over the past three months and 18.4% over the past year.
COST's strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to Buy in our rating system. The stock also has a B grade for Growth and Sentiment. Within the A-rated Grocery/Big Box Retailers industry, it is ranked #27 of 38 stocks.
In total, we rate COST on eight different levels. Beyond what we've stated above, we have also given COST grades for Quality, Stability, and Momentum. Get all the COST ratings here.
Waste Management, Inc. (WM)
WM offers waste management environmental services to residential, commercial, industrial, and municipal customers in North America. It offers collection services, including picking up and transporting waste and recyclable materials from where it was generated to a transfer station, material recovery facility (MRF), or disposal site, and owns, develops, and operates landfill gas-to-energy facilities. The company has a 0.78 beta.
WM declared a quarterly dividend of $0.65 on August 22, 2022, payable on September 23, 2022. WM’s $2.60 annual dividend yields 1.52% at the current share price. Also, it has a four-year average dividend yield of 1.76%. Its dividend payouts have increased at an 8% CAGR over the past five years.
For the second quarter ending June 30, 2022, WM’s revenue increased 12.3% year-over-year to $5.03 billion. Its adjusted income from operations grew 11.6% from its year-ago value to $907.00 million, while its adjusted net income amounted to $599.00 million, up 11.3% from its prior-year quarter. The company’s adjusted EPS rose 13.4% year-over-year to $1.44.
The $1.51 consensus EPS estimate for the third quarter ending September 2022 represents 19.7% year-over-year growth. Analysts expect revenue to increase 8.3% year-over-year to $5.05 billion for the same quarter. The company's shares have surged 10.6% over the past month and 11.7% over the past year.
It is no surprise that WM has an overall A rating, which equates to Strong Buy in our POWR Ratings system. WM has an A grade for Quality and a B grade for Sentiment and Stability. In the A-rated Waste Disposal industry, it is ranked #2 of 15 stocks.
Click here to see the additional POWR Ratings for WM (Growth, Value, and Momentum).
BMY shares were trading at $68.62 per share on Monday morning, down $2.57 (-3.61%). Year-to-date, BMY has gained 12.62%, versus a -14.50% 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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