2 Stocks That Can Withstand Any Market Condition

The Fed approved its fourth consecutive 75-bps rate hike last week, taking the target range to 3.75%-4% and marking the most aggressive monetary policy tightening since the early 1980s.

On the other hand, the U.S. labor market added 261,000 new jobs in October. Although the jobs report remains resilient, it shows signs of cooling down as employers have already replaced all of the 22 million jobs that were lost during the pandemic.

Economists expect the pace of rate hikes to slow down, with only half a percentage point hike in December followed by a few smaller hikes in 2023.

Amid this scenario, investors should stock up on fundamentally solid stocks Johnson & Johnson (JNJ) and Waste Management, Inc. (WM) as they might have the ability to withstand any turbulent market conditions.

Johnson & Johnson (JNJ)

JNJ researches, develops, manufactures, and sells various products in the healthcare field worldwide. The company operates through the Consumer Health; Pharmaceuticals; and MedTech segments.

On November 1, JNJ announced that it had entered into a definitive agreement to acquire all outstanding shares of Abiomed Inc. (ABMD) for an enterprise value of approximately $16.60 billion. This should broaden JNJ’s MedTech segment’s position as a cardiovascular innovator.

On September 20, JNJ opened its San Francisco Bay Campus, a state-of-the-art, 200,000-square-foot Research and Development (R&D) facility. The facility bridges key scientific and technical capabilities and is expected to expand the company’s presence in the Bay area.

On September 19, JNJ declared a quarterly dividend of $1.13 per common share, which is payable to shareholders on December 6. The company has an excellent record of 59 years of consecutive dividend growth.

For the fiscal third quarter that ended September 30, 2022, JNJ’s reported sales grew 1.9% from the year-ago value to $23.79 billion, while its net earnings improved 21.6% year-over-year to $4.46 billion. The company’s net earnings per share rose 22.6% from its year-ago value to $1.68.

The consensus EPS estimate of $10.04 for the fiscal year ending December 2022 indicates a 2.5% improvement year-over-year. Its consensus revenue estimate of $95.04 billion indicates a 1.4% year-over-year increase in the same period. Additionally, JNJ has topped Street EPS estimates in each of the trailing four quarters, which is impressive.

The stock has gained 3.5% over the past month to close its last trading session at $171.48. It has gained 4.2% over the past year.

JNJ’s POWR Ratings reflect this promising outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

JNJ is also rated an A in Stability and a B in Quality. Within the Medical – Pharmaceuticals industry, it is ranked #9 out of 163 stocks.

To see additional POWR Ratings for Momentum, Growth, Value, and Sentiment for JNJ, click here.

Waste Management, Inc. (WM)

WM provides waste collection, transfer, disposal, recycling, and resource recovery and owns landfill gas-to-energy facilities in the United States. The company serves residential, commercial, industrial, and municipal customers.

On September 13, 2022, WM announced its agreement to acquire a controlling interest in Avangard Innovative’s U.S. business, which would operate as Natura PCR. As an independent company, Natura PCR is expected to grow its recycling capacity to produce an estimated 400 million pounds per year of post-consumer resin (PCR) in the next five years.

On August 22, WM declared a quarterly cash dividend of $0.65 per share which was payable on September 23, 2022. This demonstrates the company’s strong cash flow positioning.

WM’s revenue came in at $5.08 billion for the fiscal third quarter that ended September 30, 2022, up 8.8% year-over-year. Its net income came in at $639 million, up 18.8% year-over-year, while its EPS came in at $1.54, indicating an increase of 20.3% year-over-year.

WM’s revenue is expected to increase by 10.1% year-over-year to $19.74 billion in fiscal 2022. Its EPS is expected to grow 18.1% year-over-year to $5.71 in the same period. It also surpassed EPS estimates in three of four trailing quarters.

Over the past nine months, the stock has gained 7.4% to close the last trading session at $155.77.

WM’s overall B rating indicates a Buy in our proprietary rating system. The stock also has a B grade for Stability and Quality. In the A-rated, 15-stock Waste Disposal industry, WM is ranked #3.

Click here to access WM’s additional POWR Ratings for Growth, Value, Sentiment, and Momentum.

JNJ shares were trading at $172.51 per share on Monday afternoon, up $1.03 (+0.60%). Year-to-date, JNJ has gained 2.83%, versus a -19.75% rise in the benchmark S&P 500 index during the same period.

Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.

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