4 Top-Rated Stocks to Buy for Stability in a Volatile Market The stock market has been suffering worrying fluctuations since the beginning of the year on investors' concerns over expected interest rate increases by the Federal Reserve to control multi-decade high...
By Dipanjan Banchur •
This story originally appeared on StockNews
The stock market has been suffering worrying fluctuations since the beginning of the year on investors' concerns over expected interest rate increases by the Federal Reserve to control multi-decade high inflation. So, we think investors that are seeking to sidestep market volatility could bet on quality stocks Walmart (WMT), CVS Health (CVS), Anthem (ANTM), and SS&C Technologies (SSNC). These companies' business models should help them deliver stable returns. Also, in our proprietary rating system, these stocks are rated B for stability. Let's discuss.
Since the beginning of the year, the stock market has been experiencing high volatility on concerns about rising inflation, geopolitical tensions between the U.S. and Russia over Ukraine, and the Fed's signal that it will raise interest rates multiple times this year.
According to BofA Securities' U.S. head of equity and quantitative research, Savita Subramanian, "It's going to be a year where we are shocked by the volatility." Her price target for the S&P 500 is 4,600. "Between today and year-end, we're going to hit that target multiple times, and we're going to see some big swings from the market," she predicted.
Because the market is expected to remain uncertain this year, betting on stocks with relatively stable performance could be a good strategy now. The business models of Walmart Inc. (WMT), CVS Health Corporation (CVS), Anthem, Inc. (ANTM), and SS&C Technologies Holdings, Inc. (SSNC) help their stocks to hold steady amid a volatile market. Therefore, we think these stocks could be good additions to one's portfolio now. Also, our proprietary POWR Ratings system has rated these stocks B for Stability.
Walmart Inc. (WMT)
Famous retailer WMT in Bentonville, Ark., operates supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, discount stores, membership-only warehouse clubs, e-commerce websites including walmart.com, walmart.com.mx, flipkart.com, and others. The company operates through the Walmart U.S., Walmart International, and Sam's Club segments.
On Jan. 25, 2022, WMT announced that it had signed an agreement to invest in indoor vertical farming company Plenty. The equity investment is part of a broader strategic partnership to utilize Plenty's indoor vertical farming technology platform to deliver fresh produce to WMT's retail stores. Chief Merchandising Officer, Walmart U.S., said, "This partnership not only accelerates agricultural innovation but reinforces our commitment to sustainability by delivering a new category of fresh that is good for people and the planet."
WMT's revenue for the fiscal third quarter, ended Oct. 31, 2021, increased 4.3% year-over-year to $140.52 billion. The company's operating income increased 0.2% year-over-year to $5.79 billion. Also, its current assets increased 12.7% year-over-year to $82.96 billion.
Analysts expect WMT's fiscal 2022 EPS to increase 17% year-over-year to $6.41. Its fiscal 2023 revenue is expected to increase 3% year-over-year to $588.60 billion. It surpassed the Street's EPS estimates in three of the trailing four quarters. And over the past year, the stock has declined 4.8% in price to close the last trading session at $137.99.
WMT's POWR Ratings reflect solid prospects. According to our proprietary rating system, it has an overall A rating, which translates to a Strong Buy. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
It has a B grade for Growth, Value, Stability, Sentiment, and Quality. It is ranked #4 of 39 stocks in the A-rated Grocery/Big Box Retailers industry. Click here to see the rating of WMT for Momentum.
CVS Health Corporation (CVS)
CVS' is a health services company that is headquartered in Woonsocket, R.I. It operates through the Pharmacy Services, Retail/LTC, Health Care Benefits, and Corporate/Other segments.
On Dec. 2, 2021, CVS announced a strategic alliance with Microsoft Corporation (MSFT) to develop innovative solutions to help consumers improve their health. The collaboration with MSFT should enable CVS to accelerate a data-driven, personalized customer experience while complying with the company's policies on patient privacy and confidentiality.
For the third quarter, ended Sept. 30, 2021, CVS' total revenues increased 10% year-over-year to $73.79 billion. The company's adjusted operating income increased 12.4% year-over-year to $4.07 billion. Also, its adjusted EPS came in at $1.97, representing an increase of 18.6% year-over-year.
For the quarter ending Dec. 31, 2021, CVS' EPS and revenue are expected to increase 48.5% and 8.8%, respectively, year-over-year to $1.93 and $75.67 billion. It surpassed consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 51.8% in price to close the last trading session at $110.83.
CVS' strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system.
It has an A grade for Growth and a B grade for Value, Stability, and Sentiment. Within the A-rated Medical – Drug Stores industry, it is ranked first out of four stocks. To see the other ratings of CVS for Momentum and Quality, click here.
Click here to checkout our Healthcare Sector Report for 2022
Anthem, Inc. (ANTM)
ANTM is a health benefits company. The Indianapolis, Ind.-based concern operates through the Commercial and Specialty Business; Government Business; IngenioRx, and Other segments. The company offers a spectrum of network-based managed care plans to large and small employers, individual, Medicaid, and Medicare markets.
On Nov. 10, 2021, ANTM announced that the company had agreed to acquire Integra Managed Care, a managed long-term care plan in New York that helps adults with long-term care needs and disabilities live safely and independently in their own homes. Executive VP of ANTM's Government Business Division, Felicia Norwood, said, "This acquisition aligns with our goal of growing Anthem's Medicaid business while serving our members with a comprehensive and coordinated approach to care."
ANTM's total revenue increased 14.9% year-over-year to $36.58 billion for the fourth quarter, ended Dec. 31, 2021. The company's adjusted net income increased 98% year-over-year to $1.26 billion. Also, its adjusted EPS came in at $5.14, representing a 102.4% increase year-over-year.
Analysts expect ANTM's EPS for its fiscal 2023 to increase 13.2% year-over-year to $32.25. Its revenue for the quarter ending June 30, 2022, is expected to increase 13.8% year-over-year to $37.88 billion. It surpassed the Street's EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 61.9% in price to close the last trading session at $465.76.
ANTM's POWR Ratings reflect solid prospects. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system.
It has a B grade for Growth, Value, Stability, and Quality. It is ranked #3 of 11 stocks in the B-rated Medical – Health Insurance industry. Click here to see the other ratings of ANTM for Momentum and Sentiment.
SS&C Technologies Holdings, Inc. (SSNC)
SSNC provides software and software-enabled services for the financial and healthcare industries. The Windsor, Conn., company owns and operates a range of technology stacks across securities accounting, front-to-back-office operations, performance and risk analytics, regulatory reporting, and healthcare information processes.
On Dec. 9, 2021, SSNC announced that it had agreed to acquire U.K.-based B2B investment platform Hubwise Holdings Ltd., which serves advisers, discretionary wealth managers, and self-directed digital D2C propositions. The acquisition is expected to help expand its reach in the U.K.-advised retail market.
SSNC's revenue for its fiscal third quarter, ended Sept. 30, 2021, increased 9.6% year-over-year to $1.26 billion. The company's adjusted net income came in at $352.90 million, representing a 19.9% increase year-over-year. Also, its adjusted EBITDA increased 15.7% year-over-year to $539.80 million.
For its fiscal 2021, SSNC's EPS is expected to increase 15.6% year-over-year to $4.97. Its revenue for the quarter ending March 31, 2022, is expected to increase 8.5% year-over-year to $1.29 billion. Also, it surpassed consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 17.1% in price to close the last trading session at $80.73.
SSNC's strong fundamentals are reflected in its POWR Ratings. The company has an overall A rating, which translates to a Strong Buy in our proprietary rating system.
It has a B grade for Growth, Value, Stability, Sentiment, and Quality. Within the Software – Application industry, it is ranked #2 of 16 stocks. To see the rating of SSNC for Momentum, click here.
Click here to check out our Software Industry Report for 2022
WMT shares rose $0.61 (+0.44%) in premarket trading Wednesday. Year-to-date, WMT has declined -4.17%, versus a -4.20% rise in the benchmark S&P 500 index during the same period.
Walmart (WMT) is a part of the Entrepreneur Index, which tracks some of the largest publicly traded companies founded and run by entrepreneurs.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master's degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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