The year 2022 has been pretty challenging for investors, with the stock market witnessing sell-offs because of the war between Ukraine and Russia, high crude oil prices, rising inflation, and the Fed's subsequent aggressive interest rate hikes.

The Fed’s aggressive rate hikes have triggered recession fears. Many economists believe that the economy could be in a recession next year. With the Fed remaining stubborn in achieving its long-term inflation target, further rate hikes could be in line. The Fed Chair indicated that the ultimate level of interest rates would be higher than previously expected.

Therefore, investors must look for stocks from industries that remain resilient during an economic downturn. Industries such as beverages, software, medical, and waste disposal are known to show resilience in an uncertain macroeconomic environment because these industries enjoy an inelastic demand for their products and services.

Hence, it could be wise to buy fundamentally sound and resilient stocks The Coca-Cola Company (KO), Oracle Corporation (ORCL), Humana Inc. (HUM), and Waste Management, Inc. (WM) on their dips with the market corrections.

The Coca-Cola Company (KO)

The global beverage company, KO, manufactures, markets, and sells various non-alcoholic beverages. The company provides sparkling soft drinks; flavored and enhanced water sports drinks; juice, dairy, and plant-based beverages; tea and coffee; and energy drinks.

Over the last three years, KO’s dividend payouts have grown at a 3.1% CAGR. Its four-year average dividend yield is 3.1%, and its current dividend translates to a 3% yield. It is expected to pay a quarterly dividend of $0.44 per share on December 15, 2022.

KO’s non-GAAP net operating revenues increased 10.2% year-over-year to $11.06 billion for the third quarter ended September 30, 2022. Its non-GAAP gross profit increased 6.5% year-over-year to $6.54 billion. The company’s non-GAAP net income increased 6.7% from the year-ago period to $3.01 billion. In addition, its non-GAAP EPS came in at $0.69, representing a 6.2% increase from the prior-year quarter.

KO’s revenue for the quarter ending December 31, 2022, is expected to increase 3.5% year-over-year to $9.80 billion. Its EPS for fiscal 2022 is expected to increase 6.9% year-over-year to $2.48. It has an impressive earnings surprise history, surpassing its consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 4% to close the last trading session at $58.77.

KO’s POWR Ratings reflect its strong fundamentals. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

Within the A-rated Beverages industry, it is ranked #21 out of 34 stocks. The company has a B grade for Stability, Sentiment, and Quality.

Click here to see the additional POWR Ratings of KO for Growth, Value, and Momentum.

Oracle Corporation (ORCL)

ORCL offers products and services that address enterprise information technology environments worldwide. Its ORCL cloud software as a service offers various cloud software applications. The company also offers cloud-based industry solutions for various industries, ORCL application licenses, and ORCL license support services.

Over the last three years, ORCL’s dividend payouts have grown at a 12% CAGR. Its four-year average dividend yield is 1.6%, and its current dividend translates to a 1.7% yield. The company paid a quarterly dividend of $0.32 per share on October 25, 2022.

On November 3, 2022, ORCL announced the launch of Oracle Public Safety Services, a new technology platform for law enforcement and first responders. The platform has a unified hardware and software suite, which includes a dispatch command center, law enforcement records, jail management software, and real-time video communication tools. This cutting-edge technology is a significant addition to the company’s offerings.

ORCL’s total revenues for the first quarter ended August 31, 2022, increased 17.7% year-over-year to $11.45 billion. Its total assets increased 19.2% to $130.31 billion, compared to $109.29 billion for the fiscal year ended May 31, 2022. 

The company’s non-GAAP operating income increased 3.3% from the prior-year period to $4.48 billion, while its net cash provided by operating activities increased 18.6% year-over-year to $6.39 billion. Moreover, its non-GAAP EPS came in at $1.03.

ORCL’s revenue for the quarter ending November 30, 2022, is expected to increase 15.4% year-over-year to $11.95 billion. Its EPS for the quarter ending February 28, 2023, is expected to increase 9% year-over-year to $1.23. Over the past month, the stock has gained 19.5% to close the last trading session at $75.66.

ORCL’s positive outlook is reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. It is ranked #24 out of 143 stocks in the Software - Application industry. It has a B grade for Stability.

We have also given ORCL grades for Growth, Value, Momentum, Sentiment, and Quality. Get all ORCL ratings here.

Humana Inc. (HUM)

HUM is a health and well-being company in the United States. It operates through three segments: Retail, Group and Specialty, and Healthcare Services. The company offers medical and supplemental benefit plans to individuals.

Over the last three years, HUM’s dividend payouts have grown at a 12.5% CAGR. Its four-year average dividend yield is 0.6%, and its current dividend translates to a 0.6% yield. It is expected to pay a quarterly dividend of $0.79 per share on January 27, 2023.

On May 16, 2022, HUM’s CenterWell Senior Primary Care and Welsh, Carson, Anderson & Stowe (“WCAS”) established a second joint venture to expand access to value-based primary care clinics for Medicare patients. The joint venture will deploy up to $1.2 billion of committed capital, and the company expects to expand its geographic footprint and serve more patients nationwide.

For the fiscal third quarter ended September 30, 2022, HUM’s non-GAAP revenues increased 9% year-over-year to $22.75 billion. Its total assets increased 14.4% to $50.76 billion, compared to $44.36 billion for the fiscal year ended December 31, 2021. The company’s non-GAAP pre-tax income increased 42.5% year-over-year to $1.14 billion. Additionally, its non-GAAP EPS came in at $6.88, representing a 42.4% increase from the year-ago period.

HUM’s EPS and revenue for the quarter ending December 31, 2022, are expected to increase 30.4% and 6.6% year-over-year to $1.62 and $22.44 billion, respectively. It has an impressive earnings surprise history, surpassing the consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 22.9% to close the last trading session at $553.47.

HUM’s strong fundamentals are reflected in its POWR Ratings. The company has an overall rating of A, which equates to a Strong Buy in our proprietary rating system. It is ranked #2 out of 11 stocks in the A-rated Medical - Health Insurance industry. In addition, it has a B grade for Growth, Value, Sentiment, and Quality.

Click here to see the other ratings of HUM for Momentum and Stability.

Waste Management, Inc. (WM)

WM provides waste management environmental services to residential, commercial, industrial, and municipal customers. It offers collection services, a material recovery facility (MRF), and owns, develops, and operates landfill gas-to-energy facilities, as well as owns and operates transfer stations.

Over the last three years, WM’s dividend payouts have grown at an 8% CAGR. Its four-year average dividend yield is 1.7%, and its current dividend translates to a 1.6% yield. The company is expected to pay a quarterly dividend of $0.65 per share on December 16, 2022.

On September 13, 2022, WM announced its acquisition of a controlling interest in Avangard Innovative's U.S. business, which will operate as Natura PCR. Natura PCR is expected to scale and grow its recycling capacity to produce an estimated 400 million pounds per year of post-consumer resin (PCR) in five years.

WM’s operating revenues for the third quarter ended September 30, 2022, increased 8.8% year-over-year to $5.08 billion. Its adjusted net income increased 21.7% year-over-year to $645 million. In addition, its adjusted EPS came in at $1.56, representing a 23.8% increase from the prior-year quarter.

Analysts expect WM’s EPS and revenue for the quarter ending December 31, 2022, to increase 13.3% and 6.5% year-over-year to $1.43 and $4.98 billion, respectively. It has a commendable earnings surprise history, surpassing the consensus EPS estimates in three of the trailing four quarters. Over the past nine months, the stock has gained 7.9% to close the last trading session at $158.20.

WM’s solid prospects are reflected in its POWR Ratings. The company has an overall rating of B, translating to a Buy in our proprietary rating system. It is ranked #3 out of 15 stocks in the A-rated Waste Disposal industry.

It has a B grade for Stability and Quality. To see the other ratings of WM for Growth, Value, Momentum, and Sentiment, click here.

KO shares were trading at $60.88 per share on Thursday afternoon, up $2.11 (+3.59%). Year-to-date, KO has gained 5.12%, versus a -15.94% rise in the benchmark S&P 500 index during the same period.

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.

More...