The stock market has been under tremendous pressure this year, with inflation running at a multi-decade high and the Fed aggressively raising interest rates to tame it. Although the stock market registered an impressive rally in the previous month, Goldman Sachs believes the market is yet to hit bottom.
While investors are awaiting the July inflation report this week, CNBC’s Jim Cramer said that the Fed could launch another rate hike this month if inflation doesn’t show signs of slowing down.
Amid this uncertain backdrop, investing in blue-chip stocks could be a wise strategy. Blue chip stocks are companies that are market leaders and possess solid fundamentals. These stocks are known for their dependable earnings and stable returns despite market downturns.
Microsoft Corporation (MSFT)
The tech behemoth, MSFT 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 August 9, Barclays Bank PLC announced the deployment of MSFT as its preferred collaboration platform for more than 120,000 colleagues and service partners globally.
In the same month, Volpara Health Technologies (VHT), a global health technology software leader for personalized breast care, announced a new research and development agreement with MSFT to accelerate the creation of a solution that detects breast arterial calcifications.
These developments demonstrate the company’s proven excellence in the industry.
MSFT’s total revenues increased 18.4% year-over-year to $49.36 billion in the fiscal quarter ended March 31, 2022. Gross profit for the quarter came in at $33.75 billion, up 17.7% year-over-year, while its net income stood at $16.73 billion. The company’s EPS increased 9.4% from its year-ago value to $2.22 in the same quarter.
Street expects MSFT’s revenue for the fiscal quarter ending September 2022 to come in at $49.88 billion, indicating a 10.1% year-over-year increase. Its EPS is expected to improve 2.3% year-over-year to $2.32. The company beat the consensus EPS estimates in three of the trailing four quarters.
Over the past month, the stock has gained 5.6% to close the last trading session at $280.32.
MSFT’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, translating to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
MSFT is also rated B in Stability and Quality. Within the Software – Business industry, it is ranked #11 of 55 stocks. Click here to see additional POWR Ratings for Value, Momentum, Growth, and Sentiment for MSFT.
AbbVie Inc. (ABBV)
ABBV is a research-based biopharmaceutical company engaged in the research and development, manufacturing, commercialization, and sale of medicines and therapies.
On August 2, Sosei Group Corporation and ABBV entered a drug discovery collaboration that focuses on the inflammatory and autoimmune disease areas. This strategic agreement is expected to leverage Sosei Heptares’ StaR® technology and structure-based drug design (SBDD) platform and ABBV’s extensive neuroscience and disease area expertise to tackle neurological diseases.
ABBV’s net revenues increased 4.5% from the prior-year quarter to $14.58 billion in the fiscal quarter ended June 2022. Net earnings attributable to ABBV for the quarter came in at $924 million, reflecting an increase of 20.6% year-over-year, while its EPS stood at $0.51, up 21.4% year-over-year.
The consensus EPS estimate of $3.60 for the fiscal third quarter ending September 2022 represents an 8.1% improvement year-over-year. The consensus revenue estimate of $14.99 billion for the same quarter represents a 4.5% increase from the same period last year.
The stock has gained 20.9% over the past nine months to close the last trading session at $140.34.
It is no surprise that ABBV has an overall rating of A, equating to Strong Buy in our POWR Ratings system. The stock also has an A grade in Quality and a B in Growth and Value. The stock is ranked #9 out of the 174 stocks in the Medical – Pharmaceuticals industry.
In addition to the POWR Rating grades I’ve just highlighted, you can see the ABBV’s ratings for Momentum, Stability, and Sentiment here.
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MSFT shares were trading at $280.35 per share on Tuesday morning, up $0.03 (+0.01%). Year-to-date, MSFT has declined -16.27%, versus a -12.71% rise in the benchmark S&P 500 index during the same period.
About the Author: Komal Bhattar
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. More...
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