The Fed announced the third consecutive 75-basis-point rate hike last week. With the central bank hinting at maintaining its hawking stance until the decades-high inflation comes under control, a recession seems unavoidable to many experts.
Since the stock market has remained under pressure, investors adding quality stocks at the current low prices will likely benefit significantly in the long run. Many experts believe investing in stocks amid market volatility is more rewarding than staying in cash.
Microsoft Corporation (MSFT)
MSFT is a tech behemoth that develops, licenses, and supports software, services, devices, and solutions worldwide. The company operates in three segments: Productivity and Business Processes; Intelligent Cloud; and More Personal Computing.
On September 22, MSFT announced its plan, along with Planet Labs PBC and The Nature Conservancy, to launch the Global Renewables Watch (GRW), a living atlas intended to map and measure all utility-scale solar and wind installations. The first full global inventory is expected to be completed by early 2023.
On September 20, MSFT declared a quarterly dividend of $0.68 per share, reflecting a 10% increase over the previous quarter’s dividend. The dividend is payable to shareholders on December 8. This reflects the cash generation ability of the company.
MSFT’s total revenue increased 12.4% year-over-year to $51.87 billion in the fourth quarter that ended June 30. Its net cash from operations grew 8.5% from the year-ago value to $24.63 billion, while its net income improved 1.7% year-over-year to $16.74 billion. The company’s net earnings per common share increased 2.8% from its year-ago value to $2.23.
The consensus EPS estimate of $2.32 for the first fiscal quarter ending September 2022 indicates a 2.3% improvement year-over-year. Revenue is expected to rise 10.1% year-over-year to $49.89 billion for the same quarter. Additionally, MSFT has topped consensus EPS estimates in three of the trailing four quarters, which is impressive.
The stock has declined 11.82% over the past month to close its last trading session at $236.41.
MSFT’s POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
MSFT is rated a B in Stability, Sentiment, and Quality. Within the Software – Business industry, it is ranked #10 out of 54 stocks.
To see additional POWR Ratings for Growth, Value, and Momentum for MSFT, click here.
Agilent Technologies, Inc. (A)
A provides application-focused solutions to global life sciences, diagnostics, and applied chemical markets. The company’s segments are Life Sciences and Applied Markets; Diagnostics and Genomics; and Agilent CrossLab.
On September 21, A announced a quarterly dividend of 21 cents per share of common stock, payable to shareholders on October 26. This reflects the strong cash position of the company.
On September 1, A announced its collaboration with METTLER TOLEDO to address error-prone sample preparation. Their co-developed solution provides a fully automated and digitalized LC or GC workflow designed to eliminate common errors in the weighing process. This should benefit the company.
A’s total net revenue increased 8.3% year-over-year to $1.72 billion for its third quarter that ended July 31, 2022. Its income from operations grew 22.3% from its prior-year quarter to $411 million. The company’s non-GAAP net income came in at $401 million, up 19% year-over-year, while its non-GAAP EPS rose 21.8% year-over-year to $1.34.
For the fiscal fourth quarter ending October 2022, A’s revenue is expected to increase 6.1% year-over-year to $1.76 billion. Its EPS is estimated to increase 14.7% year-over-year to $1.39 in the same quarter. Moreover, it surpassed EPS estimates in each of the four trailing quarters.
A’s shares have gained 0.9% over the past three months to close the last trading session at $121.61.
Unsurprisingly, Agilent has an overall A rating, equating to a Strong Buy in our proprietary rating system.
It has an A grade for Sentiment and a B grade for Value, Stability, and Quality. It is ranked #1 among 53 stocks within the Medical – Diagnostics/Research industry.
Click here for the additional POWR Ratings for Growth and Momentum for A.
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MSFT shares were trading at $241.38 per share on Wednesday afternoon, up $4.97 (+2.10%). Year-to-date, MSFT has declined -27.76%, versus a -21.03% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities. More...
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