In December 2022, consumer prices posted their biggest monthly decline since early in the pandemic. The final month’s Consumer Price Index (CPI) rose 6.5% over the previous year but was down 0.1% month-over-month. The Fed has been battling with soaring prices with consecutive outsized interest rate hikes.
Richmond Fed President Thomas Barkin warned of continued high median inflation and viewed the rate path as “slower, but longer and potentially higher.” However, he believes with inflation dropping significantly, the central bank does not need to raise interest rates as forcefully as it did last year.
The Fed is expected to lower the magnitude of the rate hike to 25 basis points at its next meeting this February. Nonetheless, market volatility is here to stay, and investors ought to be cautious.
Given this backdrop, investors might consider buying fundamentally sound stocks Sysco Corporation (SYY), Cardinal Health, Inc. (CAH), and Sisecam Resources LP (SIRE), which pay a reliable dividend to ensure steady passive income in 2023.
Sysco Corporation (SYY)
SYY engages in the marketing and distribution of various food and related products, primarily to the food service or food-away-from-home industry worldwide. Its segments include U.S. Foodservice Operations; International Foodservice Operations; SYGMA; and Other.
On November 11, 2022, SYY received its first battery-electric Freightliner eCascadia, a zero-emission Class 8 truck, in series production. This marks a critical milestone in the company’s climate journey as it works toward electrifying 35% of its U.S. fleet by 2030.
SYY has paid dividends for 52 consecutive years. Over the last three years, SYY’s dividend payouts have grown at 6.2% CAGR. While SYY’s four-year average dividend yield is 2.41%, its current dividend translates to a 2.44% yield.
SYY’s sales came in at $19.13 billion for the first quarter that ended October 1, 2022, up 16.2% year-over-year. Its net earnings increased 23.2% year-over-year to $465.57 million. In addition, its EPS increased 24.7% year-over-year to $0.91.
SYY’s revenue is expected to increase 11% year-over-year to $76.19 billion in 2023. Its EPS is expected to grow 27.7% year-over-year to $4.15 in 2023. It surpassed EPS estimates in three of the four trailing quarters. Over the past three months, the stock has gained 7.9% to close the last trading session at $80.33.
SYY’s strong fundamentals are reflected in its POWR Ratings. The stock’s overall A rating indicates a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
SYY has an A grade for Growth and a B for Stability and Value. In the B-rated Food Makers industry, it is ranked #4 out of 83 stocks. Click here for the additional POWR Ratings for Sentiment, Momentum, and Quality for SYY.
Cardinal Health, Inc. (CAH)
CAH is an integrated healthcare service and solutions provider. It offers customized solutions for healthcare organizations like hospitals, pharmacies, ambulatory surgery facilities, clinical laboratories, and patients receiving care at home. The company operates through two segments: Pharmaceutical and Medical.
On November 15, 2022, CAH announced Velocare, its new supply chain network and last-mile fulfillment solution capable of delivering crucial supplies and services required for hospital-level care at home to patients in a matter of hours. This solution is likely to transform patient care delivery.
CAH has paid dividends for 28 consecutive years. While CAH’s four-year average dividend yield is 3.63%, its current dividend translates to a 2.58% yield.
CAH’s revenues came in at $49.60 billion for the first quarter that ended September 30, 2022, up 12.8% year-over-year. Moreover, its pharmaceutical revenue came in at $45.83 billion, up 71.6% year-over-year.
Street expects CAH’s revenue to increase 11% year-over-year to $201.25 billion in 2023. Its EPS is expected to grow 4.9% year-over-year to $5.31 in 2023. The stock has gained 47.2% over the past year to close the last trading session at $76.87.
CAH’s overall A rating equates to a Strong Buy in our POWR Ratings system.
It has a B grade for Growth and Value. It is ranked #2 out of 79 stocks in the Medical – Services industry. Beyond what is stated above, we’ve also rated CAH for Value, Sentiment, Stability, and Momentum. Get all the CAH ratings here.
Sisecam Resources LP (SIRE)
SIRE engages in the trona ore mining and soda ash production businesses internationally. It processes trona ore into soda ash, a raw material in flat glass, container glass, chemicals, paper, and other consumer and industrial products.
Over the last three years, SIRE’s dividend payouts have grown at 10.7% CAGR. While SIRE’s four-year average dividend yield is 7.15%, its current dividend translates to an 8.93% yield.
SIRE’s net sales came in at $190.50 million for the third quarter that ended September 30, 2022, up 40.5% year-over-year. Its operating income came in at $32.8 million, up 295.2% year-over-year. Moreover, its net income increased 108.1% year-over-year to $15.40 million.
On October 29, 2022, Ertugrul Kaloglu, CEO, said, “The Sisecam Resources team delivered another successful quarter adding to strong year-to-date results mostly driven by strong pricing and demand in the soda ash market globally.”
SIRE has gained 31.4% over the past year to close the last trading session at $22.40.
It’s no surprise that SIRE has an overall A rating, equating to a Strong Buy in our POWR Ratings system.
It has an A grade for Growth and Quality and a B for Value and Stability. It is ranked first among 89 stocks in the B-rated Chemicals industry. To see SIRE’s ratings for Sentiment and Momentum, click here.
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SYY shares were trading at $80.33 per share on Monday morning, up $0.08 (+0.10%). Year-to-date, SYY has gained 5.75%, versus a 4.20% rise in the benchmark S&P 500 index during the same period.
About the Author: RashmiKumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions. More...
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