The sky-high inflation has recently shown signs of cooling after the Fed’s aggressive interest rate hikes. Investors are hopeful for a positive outcome in the near term as recently released minutes of the Fed’s meeting expressed support for smaller rate hikes in response to cooling inflation.
With hopes of a pivot in the Fed’s hawkish stance, beginning with a downshift to a 50 basis-point rate hike in the coming month, the stock market has gained recently. However, Deutsche Bank believes the bear market rally could continue into next year before slumping as a global recession takes hold.
Given the macroeconomic volatility, investors could opt for safer investments and invest in stocks of companies that show resilience. Investing in large-cap stocks could provide this safety to the investors as these are established companies that possess the ability to withstand challenging economic conditions.
Synopsys, Inc. (SNPS)
SNPS, with a market capitalization of $50.33 billion, provides electronic design automation software products used to design and test integrated circuits. The company offers the Fusion Design Platform, Verification Continuum Platform, and FPGA design products.
On October 26, SNPS, ANSYS, Inc. (ANSS), and Keysight Technologies, Inc. (KEYS) announced the availability of their new millimeter wave (mmWave) radio frequency (RF) design flow for TSMC’s 16nm FinFET Compact (16FFC) technology. This product release should benefit the company.
In September, SNPS declared the replenishment of its stock repurchase program with an increased authorization to purchase up to $1.50 billion of common stock. This is expected to generate sustainable, long-term shareholder value.
SNPS’ total revenues increased 18% year-over-year to $1.25 billion for the third quarter ended July 31, 2022. Non-GAAP net income and non-GAAP net income per share came in at $327.41 million and $2.10, up 15.1% and 16% from the prior-year period, respectively.
For the fiscal year ending October 2023, analysts expect SNPS’ EPS to be $10.04, indicating a 14.5% year-over-year growth. Revenue is expected to increase 11.2% from the prior year to $5.65 billion. In addition, SNPS has topped consensus EPS estimates in all four trailing quarters, which is impressive.
The stock has gained 1.9% over the past six months and 11.2% over the past month to close its last trading session at $329.12.
SNPS has an overall rating of B, which translates to Buy in our proprietary POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
SNPS is also rated an A for Quality and a B for Sentiment. In the Software – Application industry, it is ranked #20 out of 139 stocks.
Click here to see the additional POWR Ratings for SNPS (Growth, Value, Momentum, and Stability).
The Hershey Company (HSY)
With a market capitalization of $47.71 billion, HSY is a popular snacks company that offers confectionery products and pantry items globally. The company operates through three segments: North America Confectionery; North America Salty Snacks; and International.
On November 4, HSY announced quarterly dividends of $1.036 on the common stock and $0.942 on the class B common stock. The dividends are payable on December 15, 2022. It is the 372nd consecutive regular dividend on the Common Stock and the 153rd consecutive regular dividend on the Class B Common Stock, reflecting HSY’s strong cash generation ability.
For the fiscal third quarter ended October 2, 2022, HSY’s net sales came in at $2.73 billion, up 15.6% year-over-year. Its non-GAAP gross profit grew 10.8% year-over-year to $1.16 billion. In addition, its non-GAAP net income came in at $447.07 million, up 2.8% year-over-year, while its non-GAAP EPS increased 3.3% year-over-year to $2.17.
Analysts expect HSY’s revenue to increase 10.7% year-over-year to $2.57 billion in the fiscal fourth quarter of 2022. Its EPS is expected to increase 5% year-over-year to $1.77. It surpassed EPS and revenue estimates in all four trailing quarters.
The stock has gained 30.8% over the past year to close the last trading session at $232.63. It has gained 9.4% over the past six months.
HSY has an overall rating of B, which equates to a Buy in our proprietary POWR Ratings system. The stock also has a B grade for Quality and Sentiment. In the B-rated Food Makers industry, HSY is ranked #23 of 82 stocks.
Click here for the additional POWR Ratings for HSY for Growth, Value, Momentum, and Stability.
Cintas Corporation (CTAS)
CTAS, with a market capitalization of $46.14 billion, provides corporate identity uniforms and related business services primarily in the United States, Canada, and Latin America. It operates through the segments of Uniform Rental and Facility Services; First Aid and Safety Services; and All Other.
On November 15, CTAS officially opened its newest Cleanroom facility in the Syracuse, New York area, to support the rapid growth of high-tech industries. This should enhance the company’s operative capacity.
On October 25, CTAS declared a quarterly dividend of $1.15 per share of common stock payable to shareholders on December 15, 2022. CTAS has consistently raised its dividend each year since 1983. This reflects a strong record of returning capital to its shareholders.
CTAS’ total revenue increased 14.2% year-over-year to $2.17 billion for the first quarter ended August 31, 2022. Its operating income grew 11.7% from its year-ago value to $440.12 million. Its net income amounted to $351.69 million, up 6.2% from its prior-year quarter. The company’s EPS rose 9% year-over-year to $3.39.
CTAS’s revenue is expected to increase 10.6% year-over-year to $2.13 billion in the fiscal second quarter ending November 2022. Its EPS is expected to grow 9.7% year-over-year to $3.03 in the same period. CTAS has topped Street EPS and revenue estimates in each of the trailing four quarters, which is impressive.
The stock has gained 14.5% over the past six months and 6.2% over the past month to close its last trading session at $454.34.
CTAS has an overall B rating, which equates to a Buy in our proprietary POWR Rating system.
CTAS has an A grade for Quality and Sentiment and a B for Stability. Among the 44 stocks in the B-rated Outsourcing – Business Services industry, CTAS is ranked #9.
Beyond what is stated above, we have graded CTAS for Value, Growth, and Momentum. Get all CTAS ratings here.
Fortinet, Inc. (FTNT)
With a market capitalization of $40.69 billion, FTNT offers comprehensive, integrated, and automated cybersecurity solutions worldwide. It provides FortiGate hardware and software licenses for various security and networking services.
Recently, FTNT announced the availability of FortiGate Cloud-Native Firewall (FortiGate CNF) on Amazon Web Services (AWS) to simplify, scale, and modernize security operations. This might benefit the company.
In October, FTNT announced cloud-delivered enhancements to FortiSASE, its single-vendor SASE solution. John Maddison, EVP of Products and CMO, said, “The latest cloud-delivered enhancements to FortiSASE further strengthen our ability to enable consistent security and user experience no matter where users and applications are distributed.”
During the third quarter ended September 30, 2022, FTNT’s revenue increased 32.6% year-over-year to $1.15 billion. Its non-GAAP operating income surged 45.3% year-over-year to $324.90 million. The company’s non-GAAP net income attributable to FTNT grew 58.3% from the year-ago value to $262.70 million, while its non-GAAP net income per share attributable to FTNT grew 65% from the prior-year quarter to $0.33.
Street expects FTNT’s revenues and EPS to rise 34.5% and 59.9% year-over-year to $1.30 billion and $0.39, respectively, for the fiscal fourth quarter ending December 2022. Furthermore, FTNT has topped Street EPS and revenue estimates in each of the trailing four quarters.
The stock has gained 5.1% over the past three months to close the last trading session at $52.08.
FTNT’s POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to a Buy in our proprietary rating system.
FTNT also has an A grade for Quality and Sentiment and a B for Growth. Within the Software – Security industry, it is ranked first out of 22 stocks.
To see additional POWR Ratings for Momentum, Value, and Stability for FTNT, click here.
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SNPS shares were trading at $320.67 per share on Tuesday afternoon, down $8.45 (-2.57%). Year-to-date, SNPS has declined -12.98%, versus a -16.09% rise in the benchmark S&P 500 index during the same period.
About the Author: Sristi Suman Jayaswal
The stock market dynamics sparked Sristi's interest during her school days, which led her to become a financial journalist. Investing in undervalued stocks with solid long-term growth prospects is her preferred strategy. Having earned a master's degree in Accounting and Finance, Sristi hopes to deepen her investment research experience and better guide investors. More...
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