The Consumer Price Index (CPI) for December 2022 declined further, marking the sixth consecutive month of cooling inflation. CPI rose 6.5% from a year ago, the smallest annual increase since October 2021. This is raising the possibility of slower rate hikes ahead.
However, rate hikes are expected to persist for the time being, and a recession looks unavoidable. The World Bank recently warned that the global economy would come “perilously close” to a recession soon, owing to slower growth in all of the world’s major economies — the United States, Europe, and China.
Given the uncertain macro backdrop, dividend-paying stocks could be attractive investment options to ensure a steady income stream and protection. Investors’ interest in dividend stocks is evident from the SPDR S&P Dividend ETF’s (SDY) 14.8% returns over the past three months and 8.6% over the past six months.
Therefore, we think fundamentally sound dividend stocks AbbVie Inc. (ABBV), Marine Products Corporation (MPX), and Bassett Furniture Industries, Incorporated (BSET) could be ideal buy-and-hold options.
AbbVie Inc. (ABBV)
Biopharmaceutical company ABBV engages in the research, development, manufacturing, commercialization, and sale of medicines worldwide. The company’s products are segmented into Immunology; Oncology; Anaesthetics; Neuroscience; Eyecare; Women’s Health; and Others.
On January 10, 2023, ABBV and Anima Biotech (Anima) established a partnership to identify and develop mRNA biology modulators for three Oncology and Immunology targets. The collaboration is expected to contribute toward the company’s cancer treatment capabilities.
ABBV has paid dividends for nine consecutive years. Over the past three years, ABBV’s dividend payouts have grown at 9.2% CAGR. While ABBV’s four-year average dividend yield is 4.62%, its current dividend translates to a 3.89% yield.
ABBV’s net revenues came in at $14.81 billion for the third quarter that ended September 30, 2022, up 3.3℅ year-over-year. Its net earnings increased 24.2% year-over-year to $3.95 billion. In addition, its EPS increased 29.3% year-over-year to $3.66.
ABBV’s revenue is expected to increase marginally year-over-year to $13.58 billion for the quarter ending March 2023. Its EPS is expected to grow marginally year-over-year to $3.19 for the quarter ending March 2023. It surpassed EPS estimates in three of the four trailing quarters. Over the past year, the stock has gained 10.9% to close the last trading session at $152.22.
ABBV’s strong fundamentals are reflected in its POWR Ratings. The stock’s overall A rating indicates a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
ABBV has an A grade for Quality and a B for Growth and Value. In the Medical – Pharmaceuticals industry, it is ranked #8 out of 166 stocks. Click here for the additional POWR Ratings for Sentiment, Momentum, and Stability for ABBV.
Marine Products Corporation (MPX)
MPX designs, manufactures, and sells recreational fiberglass powerboats worldwide for sport boats, fishing, and jet boat markets.
MPX has paid dividends for ten consecutive years. Over the last three years, MPX’s dividend payouts have grown at 1.4% CAGR. While MPX’s four-year average dividend yield is 3.82%, its current dividend translates to a 4.40% yield.
MPX’s net sales came in at $100.06 million for the third quarter that ended September 30, 2022, up 24.2% year-over-year. Moreover, its net income came in at $11.47 million, up 71.6% year-over-year. Its EPS came in at $0.34, up 70% year-over-year.
Ben M. Palmer, President and CEO, said, “During the third quarter we continued our efforts to meet high retail and dealer demand. As the quarter progressed, we began to experience some relief in both transportation and supply chain issues which facilitated shipments of boats during the quarter.”
Street expects MPX’s revenue to increase 5% year-over-year to $312.70 million for the yet-to-be-reported fiscal 2022. Its EPS is expected to grow 10% per annum for the next five years. The stock has gained 46.9% over the past three months to close the last trading session at $13.15.
MPX’s overall A rating equates to a Strong Buy in our POWR Ratings system. It has an A grade for Growth and a B for Quality, Stability, and Sentiment. It is ranked first among the 37 Athletics & Recreation industry stocks.
Beyond what is stated above, we’ve also rated MPX for Value and Momentum. Get all MPX ratings here.
Bassett Furniture Industries, Incorporated (BSET)
BSET develops, manufactures, sources, sells, and distributes home furnishings internationally. It operates in three segments: Wholesale; Retail company-owned stores; and Logistical services. The company operates a network of more than 63 company-owned and 34 licensee-owned stores.
On January 11, 2023, BSET and Synchrony Financial (SYF), a leading consumer financing company, announced they would relaunch a multi-year financing program. The program offers consumers payment alternatives via which they can obtain promotional financing at any of the company’s 92 company and licensee-owned stores.
Over the last three years, BSET’s dividend payouts have grown at 6.3% CAGR. While BSET’s four-year average dividend yield is 5.65%, its current dividend translates to a 3.53% yield.
BSET’s net sales of furniture and accessories came in at $118.01 million for the third quarter that ended August 27, 2022, up 12.5% year-over-year. Its gross profit came in at $60.77 million, up 15.5% year-over-year, while its income from operations came in at $10.67 million, up 114.5% year-over-year.
Analysts expect BSET’s EPS to grow 16% per annum for the next five years. It surpassed EPS estimates in all four trailing quarters. Over the past year, BSET shares have gained 23.8% to close the last trading session at $18.15.
It’s no surprise that BSET has an overall A rating, equating to a Strong Buy in our POWR Ratings system. It has an A grade for Sentiment and Quality and a B for Value.
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ABBV shares were trading at $152.52 per share on Friday afternoon, up $0.30 (+0.20%). Year-to-date, ABBV has declined -4.73%, versus a 3.63% rise in the benchmark S&P 500 index during the same period.
About the Author: RashmiKumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions. More...
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