While a slight decline in inflation and better-than-expected corporate earnings helped the stock market recover in July and earlier this month, the potential continuation of interest rate hikes has increased market volatility. The benchmark stock indexes witnessed declines in the last two weeks, and the S&P 500 is still down 15% year to date.
Federal Reserve Chairman Jerome Powell said the central bank would continue raising interest rates further to bring inflation down to its 2% target. Senator Elizabeth Warren said she is “very worried” about a potential recession after the Federal Reserve once again hiked interest rates to tame inflation.
Amid this uncertain backdrop, investing in blue-chip stocks could be wise. Blue chip stocks are issued by companies that are market leaders. Their broader market reach and pricing power help them perform steadily, irrespective of economic conditions. These stocks are known for their dependable earnings and stable returns.
Ford Motor Company (F)
F designs, manufactures, markets, and services a range of Ford trucks, cars, sport utility vehicles, electrified vehicles, and Lincoln luxury vehicles worldwide. It has three operational segments: Automotive, Mobility, and Ford Credit.
For the second quarter ending June 30, 2022, F’s total revenues increased 57.1% year-over-year to $37.91 billion. Its operating income amounted to $2.87 billion compared to an operating loss of $22.00 million in the prior-year quarter, while its net income grew 18.9% from its prior-year quarter to $667.00 million. The company’s non-GAAP adjusted EPS increased 423.1% year-over-year to $0.68.
The consensus EPS estimate of $0.52 for the third quarter ending September 2022 represents a 1.3% year-over-year growth. Analysts expect revenue to increase 13.1% year-over-year to $37.57 billion for the same period. The stock has gained 19.5% over the past year and 22.9% over the past month to close the last trading session at $15.41.
F’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 a B grade for Value, Sentiment, and Growth. Within the Auto & Vehicle Manufacturers industry, it is ranked #18 of 65 stocks.
To see additional POWR Ratings for Stability, Quality, and Momentum, click here.
Cenovus Energy Inc. (CVE)
CVE develops, produces, and markets crude oil, natural gas liquids, and natural gas in Canada, the United States, and the Asia Pacific region. The company operates through Oil Sands, Conventional, Offshore, Canadian Manufacturing, U.S. Manufacturing, and Retail segments.
Recently, CVE announced the commencement of tender offers to purchase for cash certain of its outstanding series of notes for an aggregate purchase price, excluding accrued and unpaid interest, of up to $1.5 billion.
This month CVE has reached an agreement to purchase bp’s 50% interest in the bp-Husky Toledo Refinery in Ohio. CVE has owned the other 50% of the refinery since its combination with Husky Energy in 2021.
In the second quarter ended June 30, CVE’s cash from operating activities increased 118% year-over-year to $2.98 billion. Its net earnings grew 986% from its year-ago value to $2.43 billion, while its EPS rose to $1.19 from $0.11 a year ago. The company’s adjusted funds flow improved 70.5% from its prior-year quarter to $3.1 billion.
The consensus EPS estimate of $0.93 for the third quarter ending September 2022 represents a 199.7% improvement year-over-year. Analysts expect revenue to increase 47.9% year-over-year to $16.03 billion for the same quarter.
CVE has gained 136.8% over the past year and 55.8% over the past nine months to close the last trading session at $19.30.
CVE’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our rating system. The stock also has an A grade for Momentum and a B for Value and Growth. Within the B-rated Energy – Oil & Gas industry, it is ranked #17 of 97 stocks.
In total, we rate CVE on eight different levels. Beyond what we’ve stated above, we have also given CVE grades for Stability, Quality, and Sentiment. Get all CVE ratings here.
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F shares were trading at $15.47 per share on Monday afternoon, up $0.06 (+0.39%). Year-to-date, F has declined -23.88%, versus a -14.32% 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. More...
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