The Federal Reserve has hiked interest rates by 75 basis points for two consecutive months. The Fed members voted unanimously in favor of the supersized rate increase this month to tackle the skyrocketing inflation.
Moreover, unemployment claims hit their highest level since November this month. On top of it, the U.S. economy contracted at a 0.9% annualized pace for the second quarter. The second straight GDP decline meets the rule of thumb for a recession.
A shrinking economy with soaring prices and dampening employment gained the ‘stagflation’ moniker under President Jimmy Carter. Layoffs also came in high this week, with initial jobless claims totaling 256,000 for the week ended July 23.
With increased fears of a possible recession, investors are increasingly turning toward dividend stocks as a stable income source. As of late June, dividend funds have added $43 billion.
Natural Resource Partners L.P. (NRP)
NRP owns, manages, and leases a portfolio of mineral properties in the United States. The company operates through its two broad segments, Mineral Rights and Soda Ash, owning interests in coal, soda ash, trona, and other natural resources.
On June 15, NRP announced it had retired $98 million of its 9.125% Senior Notes due 2025 in the second quarter of this year. Craig Nunez, NRP’s president and chief operating officer, said, “This early debt reduction demonstrates our ongoing commitment to solidify our capital structure and maximize unitholder value.”
On May 5, NRP declared a cash distribution of $0.75 per common unit, which was payable to shareholders on May 24. Its annual dividend of $3.00 yields 7.35% on prevailing prices. The company’s dividend payouts have increased at a 5.3% CAGR over the past three years and a 3.1% CAGR over the past five years.
NRP’s total revenues and other income increased 141.5%% year-over-year to $89.72 million in the first quarter ended March 31. Its income from operations grew 299.3% from the year-ago value to $73.29 million, while its net income improved 662.4% year-over-year to $63.90 million. The company’s net earnings per common unit increased 6,120% from its year-ago value to $3.11.
The stock has gained 85.5% over the past year and 22.1% year-to-date to close its last trading session at $40.80.
NRP’s POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
NRP is rated a B in Growth, Momentum, Sentiment, and Quality. Within the A–rated MLPs – Other industry, it is ranked #1 out of 12 stocks. Click here to see additional POWR Ratings for Value and Stability for NRP.
Kronos Worldwide, Inc. (KRO)
KRO is a global producer and seller of titanium dioxide pigments (TiO2). The company produces TiO2 in two crystalline forms, rutile and anatase, to provide whiteness, brightness, opacity, and durability for various products.
In May, KRO declared a dividend of $0.19 per share on its common stock, which was payable to shareholders on June 16. This cumulates to an annual dividend of $0.76 and yields 4.39% on the current share price. KRO’s dividend payouts have increased at CAGRs of 1.9% over the past three years and 4.3% over the past five years.
KRO’s net sales came in at $562.90 million for the first quarter ended March 31, representing a 21.1% year-over-year growth. Its income from operations grew 145% from the prior-year quarter to $83.30 million, while its net income rose 193.4% from the same period last year to $57.50 million. The company’s net income per share increased 194.1% from the prior-year period to $0.50.
Analysts expect KRO’s revenue for the quarter ended June 2022 to be $542 million, indicating a 13.3% year-over-year growth. The company’s EPS for the same quarter is expected to increase 118.2% from the prior-year quarter to $0.48.
KRO has gained 22.8% over the past year and 15.4% year-to-date to close its last trading session at $17.32.
It is no surprise that KRO has an overall A rating, which translates to Strong Buy in our POWR Ratings system.
KRO has a B grade for Growth, Value, Stability, and Sentiment. It is ranked #3 out of 89 stocks in the A-rated Chemicals industry.
Beyond what we’ve stated above, we have also given KRO grades for Momentum and Quality. Get all the KRO ratings here.
Bristol-Myers Squibb Company (BMY)
BMY engages in the discovery, development, licensing, manufacture, and sale of biopharmaceutical products globally. The company’s offerings include products for hematology, oncology, cardiovascular, immunology, fibrotic, neuroscience, and COVID-19 diseases.
On June 24, BMY announced that the U.S. Food and Drug Administration’s (FDA) approval of Breyanzi® (lisocabtagene maraleucel), a CD19-directed chimeric antigen receptor (CAR) T cell therapy for the treatment of adult patients with large B-cell lymphoma (LBCL). This might benefit the company.
On June 3, BMY announced a definitive merger agreement to acquire Turning Point Therapeutics, Inc. (TPTX) for $76.00 per share. The acquisition is anticipated to close during the third quarter of 2022 and is expected to expand the company’s oncology franchise.
In June, BMY declared a quarterly dividend of $0.54 per share on its $.10 par value common stock, which is payable to shareholders on August 1. Its annual dividend of $2.16 yields 2.89% on prevailing prices. The company’s dividend payouts have increased at a 9% CAGR over the past three years and a 6.4% CAGR over the past five years. The company has 15 years of consecutive dividend growth.
In the second quarter ended June 30, BMY’s total revenues increased 1.6% year-over-year to $11.89 billion. The company’s non-GAAP net earnings attributable to BMY amounted to $4.15 billion, up 13.2% year-over-year, while the non-GAAP EPS improved 18.4% from the prior-year quarter to $1.93.
Analysts expect BMY’s revenue for the fiscal year 2023 to be $47.81 billion, indicating a 3.7% year-over-year growth. The company’s EPS is expected to increase 7% from the prior year to $8.01 for the same fiscal year. BMY has topped consensus EPS estimates in each of the trailing four quarters, which is impressive.
BMY has gained 8.7% over the past year and 19.8% year-to-date to close its last trading session at $74.70.
BMY’s strong fundamentals are reflected in its POWR Ratings. The stock’s overall A rating translates to Strong Buy in our proprietary rating system.
BMY has an A grade for Value and a B for Growth and Quality. In the 169-stock Medical -Pharmaceuticals industry, it is ranked #6.
Beyond what we’ve stated above, we have also given BMY grades for Momentum, Stability, and Sentiment. Get all the BMY ratings here.
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NRP shares were trading at $40.54 per share on Friday afternoon, down $0.26 (-0.64%). Year-to-date, NRP has gained 24.68%, versus a -12.73% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. More...
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