The stock market has suffered immense volatility since the start of the year due to supply chain disruptions, geopolitical uncertainties, and rising inflationary pressures. The Dow Jones Industrial Average fell 16% year-to-date, while the S&P 500 and Nasdaq Composite declined 21.1% and 29.3%, respectively. The S&P 500 lost 5.8% last week, marking its biggest weekly loss since March 2020.
According to economists polled by Reuters, the Federal Reserve will announce another 75-basis-point interest rate hike in July, followed by a half-percentage-point rise in September. Moreover, Powell said that a recession in the United States remains a "possibility" and commented that a soft landing would be "very challenging" to achieve.
According to the Bank of America, investors should 'gorge' on stocks if the market falls another 18%. So blue-chip companies with a history of sustained success and large market capitalizations might be good investments to navigate a volatile market in the near term.
Blue-chip companies ConocoPhillips (COP), Archer-Daniels-Midland Company (ADM), and The Mosaic Company (MOS) have outperformed the broader market this year and are well-positioned to survive the current market fluctuations. So, it could be wise to add these stocks to your portfolio.
ConocoPhillips (COP)
Headquartered in Houston, Texas, COP explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids worldwide. It is primarily involved in conventional and tight oil reservoirs, shale gas, heavy oil, LNG, oil sands, and other production operations.
During the first quarter of fiscal 2022, COP’s total revenues and other income amounted to $19.29 billion. Its net income grew 486.5% from its year-ago value to $5.76 billion, while its EPS improved 485.3% from its prior-year quarter to $4.39.
Analysts expect COP's revenue to increase 86% year-over-year to $18.99 billion for the second quarter ending June 2022. The consensus EPS estimate of $3.79 represents a 198.6% improvement year-over-year for the second quarter ending June 2022. Moreover, it has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in all of the trailing four quarters.
The stock has gained 37.6% year-to-date and 67.3% over the past nine months.
COP's POWR Ratings reflect this promising outlook. The company has an overall B rating, 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 Momentum and a B for Sentiment and Quality. Within the B-rated Energy - Oil & Gas industry, it is ranked #28 of 100 stocks.
To see additional POWR Ratings for Value, Growth, and Stability for COP, click here.
Archer-Daniels-Midland Company (ADM)
ADM procures, transports, stores, processes, and merchandises agricultural commodities, products, and ingredients worldwide. The company has three operational segments, Ag Services and Oilseeds; Carbohydrate Solutions; and Nutrition. It acquires, stores, cleans, and transports agricultural raw materials, such as oilseeds, corn, wheat, milo, oats, and barley.
Last month, ADM announced that it would invest to significantly expand starch production at its Marshall, Minnesota, facility to meet fast-growing demand from the food and beverage sectors and to support the continued expansion of the company’s BioSolutions platform.
In April, ADM announced that it would invest approximately $300 million to expand its Decatur, Illinois, alternative protein production since the company continues to amplify its capacity to meet strong demand growth. ADM will further improve its alternative protein capabilities by opening a new, state-of-the-art Protein Innovation Center in Decatur.
For the first quarter ending March 31, 2022, ADM's revenues increased 25.2% year-over-year to $23.65 billion. Its gross profit grew 23% from its year-ago value to $1.90 billion, while its adjusted net earnings improved 38.2% from its prior-year quarter to $1.08 billion.
Analysts expect ADM's revenue to increase 9.6% year-over-year to $25.13 billion for the second quarter ending June 2022. The consensus EPS estimate of $1.66 for the second quarter ending June 2022 represents a 24.7% improvement year-over-year. Moreover, it has an impressive earnings history as it surpassed the consensus EPS estimate in all of the trailing four quarters.
The company's shares have surged 17.5% year-to-date and 32.3% over the past nine months.
It is no surprise that ADM has an overall B rating, which equates to Buy in our POWR Ratings system. ADM has a B grade for Growth and Value. Among the 34 stocks in the D-rated Agriculture industry, it is ranked #5.
Click here to see the additional POWR Ratings for ADM (Stability, Sentiment, Quality, and Momentum).
The Mosaic Company (MOS)
MOS produces and markets concentrated phosphate and potash crop nutrients in North America and internationally. The company has three operational segments: Phosphates, Potash, and Mosaic Fertilizantes.
For the first quarter ending March 31, 2022, MOS’ net sales increased 70.8% year-over-year to $3.92 billion. Its operating earnings grew 301% from its year-ago value to $1.26 billion, while its net earnings improved 654.3% from its prior-year quarter to $1.18 billion. The company’s adjusted EPS rose 322.8% year-over-year to $2.41.
The consensus EPS estimate of $4.06 for the second quarter ending June 2022 represents a 247% year-over-year growth. Analysts expect revenue to increase 106.6% year-over-year to $5.79 billion for the second quarter ending June 2022. The stock has gained 31.3% year-to-date and 59.1% over the past nine months.
MOS' 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 an A grade for Growth and a B for Value and Quality. Within the Agriculture industry, it is ranked #7.
In total, we rate MOS on eight different levels. Beyond what we've stated above, we have also given MOS grades for Stability, Sentiment, and Momentum. Get all the MOS ratings here.
COP shares were trading at $92.28 per share on Thursday morning, down $0.78 (-0.84%). Year-to-date, COP has gained 29.45%, versus a -20.28% 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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