Market volatilities, triggered by the recessionary fears amid the macroeconomic headwinds, are anticipated to remain anchored for quite some time. Amid such uncertainties, investors can opt for fundamentally strong stocks of companies to capitalize on the market dynamics.
In this backdrop, let us probe into stocks of top-rated companies, such as Comcast Corporation (CMCSA), Medtronic plc (MDT), and GSK plc (GSK), which could be wise portfolio additions now, for the reasons mentioned throughout the article.
The blend of macroeconomic headwinds and the recent regional banking collapses have added fuel to the already existing recessionary fears. Such fears unleashed chaos across the market, and the uncertainties are anticipated to hover for a while.
Brian Jacobsen, the senior investment strategist at Allspring Global Investments, commented on the stock market outlook for April 2023: “April is going to be an interesting time.” He thinks that although earnings season is always a much-watched period among Wall Street types, it would take on “heightened importance” as investors try to navigate investing amid economic slowdown concerns.
Moreover, as per the recent job report, the addition of 236,000 jobs in March, compared to the Dow Jones estimate of 238,000, signals moderate hiring. This indicated that the Fed’s inflation-fighting campaign is gradually taking hold.
Furthermore, policymakers are strictly observing the reaction of banks, investors, and lenders to such macroeconomic chaos before making a decision at its next meeting. Amid such volatilities, stocks of top-rated companies such as CMCSA, MDT, and GSK might be wise investments today.
Comcast Corporation (CMCSA)
CMCSA operates as a media and technology company worldwide. It operates through Cable Communications; Media; Studios; Theme Parks; and Sky segments.
On January 23, CMCSA announced the further expansion of its smart, fast, and reliable fiber-rich network to more than 2,600 homes and businesses in Plainfield. This follows the company’s announcement in May 2022 that it would expand to more than 2,500 residents and businesses in Jewett City. CMCSA is scheduled to complete these expansion projects this year.
On January 26, CMCSA announced an increase in its dividend by $0.08 or 7.4% year-over-year. In accordance with the increase, its board of directors declared a quarterly dividend of $0.29 per share, payable on April 26, 2023. This reflects the company’s robust cash-generation abilities.
In terms of the trailing-12-month EBIT margin, CMCSA’s 18.63% is 128.9% higher than the 8.14% industry average. Likewise, its trailing-12-month gross profit margin of 68.53% is 36.5% higher than the industry average of 50.22%.
CMCSA’s revenue increased marginally year-over-year to $30.55 billion for the fiscal fourth quarter that ended December 31, 2022. Its revenue from cable communications grew 1.4% from the year-ago value to $16.64 billion, while cable communications adjusted EBITDA was $7.20 billion, up 1.5% year-over-year.
In addition, its adjusted net income stood at $3.52 million, while adjusted EPS came in at $0.82, representing an increase of 6.5% year-over-year.
Street expects CMCSA’s EPS to increase marginally year-over-year to $0.97 for the fiscal third quarter ending September 2023. Furthermore, revenue for the same quarter is expected to come in at $30.04 billion, marginally up from the year-ago quarter. It surpassed EPS and revenue estimates in all four trailing quarters, which is impressive.
The stock has gained 1.2% over the past five days and 31.2% over the past six months to close the last trading session at $38.23.
CMCSA’s POWR Ratings reflect its promising outlook. It has an overall B rating representing Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
CMCSA has a B grade for Stability and Quality. It is ranked first among nine stocks in the Entertainment – TV & Internet Providers industry.
Click here to see the additional POWR Ratings for CMCSA (Growth, Value, Momentum, and Sentiment).
Medtronic plc (MDT)
Headquartered in Dublin, Ireland, MDT develops, manufactures, and sells device-based medical therapies to healthcare systems, physicians, clinicians, and patients worldwide. It operates in four segments: Cardiovascular Portfolio; Medical Surgical Portfolio; Neuroscience Portfolio; and Diabetes Operating Unit.
On March 23, MDT announced that its wholly-owned subsidiary, Medtronic Global Holdings S.C.A., had priced an offering of $1 billion principal amount of 4.25% senior notes due 2028 and $1 billion principal amount of 4.50% senior notes due 2033.
MDT’s board of directors approved a dividend of $0.68 per ordinary share, payable to the shareholders on April 14, 2023. The company has paid dividends for 44 consecutive years. This reflects its shareholder return abilities.
In terms of the trailing-12-month EBITDA margin, MDT’s 28.06% is 930.6% higher than the 2.72% industry average. Likewise, its trailing-12-month gross profit margin of 66.73% is 19.5% higher than the industry average of 55.85%.
MDT’s total revenue worldwide stood at $7.73 billion for the fiscal third quarter that ended January 27, 2023. For the same quarter, its non-GAAP operating profit stood at $2 billion. Non-GAAP net income attributable to MDT and non-GAAP EPS came in at $1.73 billion and $1.30, respectively.
Moreover, for the nine months that ended January 27, MDT’s cash and cash equivalents stood at $4.52 billion compared to $3.48 billion for the nine months that ended January 28, 2022.
Analysts expect MDT’s EPS for the fiscal fourth quarter ending April 30 to increase 2.5% year-over-year to $1.56. Its revenue for the same quarter is expected to come in at $8.26 billion, up 2.1% year-over-year. It has a commendable earnings surprise history, as it surpassed the consensus EPS estimates in three of the trailing four quarters.
The stock has gained 4.6% over the past month to close the last trading session at $80.24.
It is no surprise that MDT has an overall rating of B, which translates to Buy in our POWR Ratings system.
It has a B grade for Value and Stability. MDT is ranked #17 out of 138 stocks in the Medical – Devices & Equipment industry.
We have also given MDT grades for Growth, Momentum, Sentiment, and Quality. Get all MDT ratings here.
GSK plc (GSK)
GSK, headquartered in Brentford, United Kingdom, creates, discovers, develops, manufactures, and markets pharmaceutical products, vaccines, over-the-counter medicines, and health-related consumer items globally. Its segments include Pharmaceuticals; Pharmaceuticals R&D; Vaccines; and Consumer Healthcare.
On March 30, GSK and SCYNEXIS, Inc. (SCYX) announced an exclusive license agreement for Brexafemme (ibrexafungerp tablets), an FDA-approved, first-in-class antifungal for the treatment of vulvovaginal candidiasis (VVC) and reduction in the incidence of recurrent VVC (RVVC).
This exclusive license agreement gives GSK rights to commercialize Brexafemme for VVC and RVVC while continuing to develop ibrexafungerp, which is in phase III clinical trials for the potential treatment of Invasive Candidiasis (IC), a life-threatening fungal infection.
On February 1, GSK announced the payment of a quarterly dividend of $0.3404 per share to shareholders on April 13, 2023. This reflects its cash generation abilities.
GSK’s trailing-12-month EBITDA margin of 32.29% is significantly higher than the industry average of 2.72%. Also, its trailing-12-month gross profit margin of 67.92% is 21.6% higher than the industry average of 55.85%.
For the fiscal fourth quarter that ended December 31, 2022, GSK’s turnover increased 4.2% year-over-year to £7.38 billion ($9.14 billion), and its adjusted gross profit grew 19.2% year-over-year to £5.35 billion ($6.63 billion). Its adjusted operating profit rose 21% from the year-ago value to £1.60 billion ($1.98 billion).
Moreover, the company’s adjusted total profit attributable to shareholders and adjusted total earnings per share came in at £1.04 billion ($1.29 billion) and 25.8p, up 10.3% and 9.3% from the prior year’s quarter, respectively.
Analysts expect revenue to come at $36.13 billion for the ongoing fiscal year (ending December 2023). The EPS estimate of $3.51 for the current year indicates a 2% year-over-year improvement. Also, GSK surpassed its consensus revenue in each of the four trailing quarters.
Shares of GSK have gained 25.4% over the past six months and 13% over the past month to close the last trading session at $37.87.
GSK’s POWR Ratings reflect its solid prospects. The stock has an overall rating of B, equating to Buy in our proprietary rating system.
The stock has an A grade for Value and Sentiment and a B for Quality. Within the Medical - Pharmaceuticals industry, it is ranked #16 of 165 stocks.
To see additional POWR Ratings for Growth, Stability, and Momentum for GSK, click here.
Consider This Before Placing Your Next Trade…
We are still in the midst of a bear market.
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CMCSA shares were trading at $38.35 per share on Tuesday morning, up $0.12 (+0.31%). Year-to-date, CMCSA has gained 11.37%, versus a 7.51% rise in the benchmark S&P 500 index during the same period.
About the Author: Sristi Suman Jayaswal
The stock market dynamics sparked Sristi's interest during her school days, which led her to become a financial journalist. Investing in undervalued stocks with solid long-term growth prospects is her preferred strategy. Having earned a master's degree in Accounting and Finance, Sristi hopes to deepen her investment research experience and better guide investors.
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