2 Red-Hot Dow Jones Stocks With More Leeway
Since the start of 2022, concerns about the Federal Reserve tightening monetary policy to combat high inflation and the Russian-Ukrainian war have weighed heavily on investors and pushed benchmarks into correction territory. Moreover, the job in May better than expected report fueled the Fed’s commitment to raise interest rates to ease inflationary pressure. The Dow Jones Industrial Average (DJIA) has fallen almost 10% since the start of the year.
Even though market stocks have had an uneven recovery over the past few weeks, the DJIA Cyclical Index is expected to decline further amid the growing likelihood of a recession. Most CFOs expect Dow Jones falls below 30,000, registering a drop of more than 18% compared to its current level. Despite its lackluster performance and outlook, some quality stocks with improving fundamentals and strong growth prospects are outperforming the Dow Jones Index.
Considering these factors, the quality constituents of the Dow Jones Verizon communications inc. (VZ) and Amgen Inc. (AMGN) are expected to recover further and therefore may be ideal additions to his portfolio.
Verizon Communications Inc. (VZ)
VZ provides communication, technology, information and entertainment products and services worldwide. The Company operates through two segments: Consumer; and Business. It offers postpaid and prepaid service plans, wireless equipment, wireless Internet devices and residential fixed connectivity solutions. Additionally, it provides network connectivity products, data security services, and more.
On May 25, VZ collaborated with AWS to bring 5G mobile edge computing to more US metro areas including Nashville, TN and Tampa, FL. Using the 5G Edge version with AWS Wavelength, developers and enterprises can build and deploy latency-sensitive applications for use cases such as immersive VR gaming, video distribution, and autonomous vehicles. This collaboration is expected to increase market reach and revenue for the company.
On May 18, VZ allocated $97.90 million to its local capital expenditures to meet growing demand from the recent pandemic-related population surge in Texas. “We are committed to providing the best possible network experience for our customers, including those who are constantly changing locations in Texas and beyond. We have revised our forecasting models and are injecting additional capital into the state to expand our coverage and ability to meet increased demands,” said Kyle Malady, executive vice president and president, Global Networks and Technology.
VZ’s consolidated operating revenue increased 2.1% year-over-year to $33.55 billion in the first quarter of fiscal 2022 ended March 31, 2022. Adjusted EBITDA was $12.03 billion. Additionally, the company’s current assets and total assets stood at $35.58 billion and $365.72 billion, respectively, as of March 31, 2022.
Analysts expect VZ’s EPS to rise 3.1% year-over-year to $5.57 for its 2023 fiscal year, ending Dec. 31, 2022. The consensus revenue estimate of $139.60 billion for next year represents a 2% increase over the previous year. Additionally, the company has exceeded consensus EPS estimates in each of the past four quarters.
Shares of VZ have risen 5.7% over the past month and closed yesterday’s trading session at $51.55.
VZ POWR Rankings reflect this promising prospect. It has an overall rating of B, which is equivalent to Buy in our proprietary rating system. POWR ratings rate stocks on 118 different factors, each with its own weighting.
VZ has a B rating for stability. Within the Telecom – Domestic industry, it is ranked #4 out of 21 stocks. To view additional POWR (Value, Quality, Momentum, Growth, and Sentiment) ratings for VZ, Click here.
Amgen Inc. (AMGN)
AMGN develops, manufactures and supplies human therapeutic products worldwide. The company focuses on areas such as bone health, cardiovascular disease, inflammation and neuroscience. AMGN’s products include Neulasta, Enbrel, Prolia, Xgeva, Otezla, Aranesp, Kyprolis and Repatha. It serves healthcare providers, including doctors, dialysis centers, hospitals, and pharmacies.
This week, AMGN announced that the U.S. Food and Drug Administration (FDA) has approved RIABNI™ (rituximab-arrx), a biosimilar to Rituxan®, for adults with moderate to severe active rheumatoid arthritis (RA). The company’s fully integrated portfolio of innovative and biosimilar drugs for inflammatory diseases could drive its growth and profitability.
During the first quarter of fiscal 2022 ended March 31, 2022, AMGN’s total revenue increased 5.7% year-on-year to $6.24 billion. The company’s non-GAAP operating profit rose 9.6% year-over-year to $3.14 billion. AMGN’s non-GAAP net income rose 9% from the year-ago quarter to $2.34 billion. Additionally, the company’s non-GAAP earnings per share were $4.25, up 14.9% year-over-year.
The consensus revenue estimate of $27.22 billion for fiscal year 2023, ending December 2023, represents a 3.8% improvement over last year. Analysts expect AMGN’s EPS for the same year to rise 9.2% year-over-year to $19.06. The company has an impressive track record of revenue and earnings, having exceeded consensus revenue estimates in three of the past four quarters and consensus EPS estimates in each of the past four quarters.
Over the past six months, AMGN has gained 15.5% to close yesterday’s trading session at $245.48. Moreover, its gain since the beginning of the year translates into 8.3%.
AMGN’s POWR ratings reflect a strong outlook. The company has an overall rating of A, which translates to Strong Buy in our proprietary rating system.
AMGN has a rating of A for quality and B for growth and stability. Among the 400 shares of the biotechnologies industry, it is ranked #4. Click here for additional POWR ratings for Sentiment, Momentum, and Value for AMGN.
Shares of VZ were trading at $50.85 per share on Friday afternoon, down $0.09 (-0.18%). Year-to-date, VZ has gained 0.25%, versus a -17.35% rise in the benchmark S&P 500 over the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using its fundamental approach to stock analysis, Mangeet seeks to help retail investors understand the underlying factors before making investment decisions. After…