Dow component companies are trading higher along with a rise in the stock market today. Furthermore, some stocks showed early signs of recovery this week after vaccine manufacturers announced that they were on their way to producing vaccines to immunize against the omicron variant.
Although the economy is under inflationary pressure, a recent decline in weekly jobless claims, better-than-expected private payrolls in November, and President Biden’s strategic initiatives to contain the spread of the omicron variant should keep the market’s momentum going. The surge in U.S. consumer spending over the holiday season could further strengthen investor confidence, and stocks may finish the year on a high note.
Given this backdrop, we think it could be wise to bet on fundamentally sound Dow stocks UnitedHealth Group Incorporated (UNH), Walmart Inc. (WMT), Amgen Inc. (AMGN), and Walgreens Boots Alliance, Inc. (WBA). These names possess solid growth attributes and are expected to gain in price in the coming months.
UnitedHealth Group Incorporated (UNH)
Incorporated in 1977, UNH is a Minnetonka, Minn.-based healthcare and well-being company that operates through four segments: UnitedHealthcare; OptumHealth; OptumInsight; and OptumRx. The company’s segments offer health benefit plans, services dealing with chronic disease, Medicaid plans, children’s health insurance programs, access to networks of care provider specialists, and various other health management services.
This month, UNH introduced The Doctors Plan of Arizona, a health plan for consumers in Southwest Arizona. This plan should provide personalized, simplified, affordable, and patient-focused health care and seamless customer support.
The company’s total revenues increased 11.1% year-over-year to $72.34 billion in the third quarter, ended September 30, 2021. The company’s earnings from operations grew 22.8% from their year-ago value to $5.71 billion. Its net earnings rose 28.7% from the prior-year quarter to $4.19 billion. Also, its EPS increased 29.7% year-over-year to $4.28.
Analysts expect UNH’s revenue for its fiscal year 2021 to be $286.24 billion, representing an 11.3% increase year-over-year. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Also, its EPS is expected to grow 11.6% in the current year. Its stock price has increased 32.8% over the past nine months.
UNH’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
Also, the stock has a B grade for Quality, Stability, and Growth. We have also graded UNH for Sentiment, Value, and Momentum. Click here to access all UNH’s ratings. UNH is ranked #1 of 11 stocks in the B-rated Medical – Health Insurance industry.
Walmart Inc. (WMT)
Formerly known as Wal-Mart Stores, Inc, WMT runs retail, wholesale, e-commerce, and other global units under Walmart U.S.; Walmart International; and Sam’s Club segments. The Bentonville, Ark.-based company operates in supercenters, hypermarkets, warehouse clubs, cash and carry stores, and other mobile commerce applications. WMT also offers grocery products, home improvements, and a wide range of appliances.
Last month, WMT and Zipline launched the instant delivery service in Pea Ridge, Ark. for this new delivery service, Zipline’s autonomous aircraft should make on-demand deliveries of selected health and wellness and consumable items to the consumers from WMT’s stores in Pea Ridge, Ark. Through this delivery system, WMT will be making shopping convenient and easy for the consumers.
During the third quarter, ended October 31, 2021, WMT’s total revenues increased 4.3% year-over-year to $140.53 billion. The company’s operating income grew 0.2% from its year-ago value to $5.79 billion. Its net sales rose 4.1% from the prior-year quarter to $139.21 billion. Also, the company’s EPS came in at $1.11 during the period.
WMT’s revenue is expected to increase 2.3% year-over-year to $572.13 billion in its fiscal year 2022. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Also, its EPS is expected to increase 17% in the current year. Furthermore, the stock has gained 4.4% in price over the past nine months.
WMT’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. Also, the stock has an A grade for Stability and a B for Quality and Value.
In addition to the POWR Rating grades I’ve just highlighted, one can see WMT’s ratings for Growth, Momentum, and Sentiment here. The stock is ranked #5 of 40 stocks in the A-rated Grocery/Big Box Retailers industry.
Amgen Inc. (AMGN)
AMGN in Thousand Oaks, Calif., is a biotechnology company that discovers, develops, manufactures, and delivers human therapeutics worldwide. The company operates primarily in inflammation, oncology/hematology, bone health, cardiovascular disease, nephrology, and neuroscience areas. Neulasta, Aranesp, EPOGEN, XGEVA, and Prolia are some of AMGN’s products.
This month, Amgen announced that the U.S. Food and Drug Administration (FDA) approved the expansion of the KYPROLIS U.S. prescribing information to include its use in combination with DARZALEX FASPRO and dexamethasone for the treatment of adult patients. This KYPROLIS plus dexamethasone should offer increased flexibility and convenience to patients with relapsed or refractory multiple myeloma and significantly reduce the administrative burden.
AMGN’s total revenues increased 4.4% year-over-year to $6.71 billion for the third quarter, ended September 30, 2021. The company’s operating income grew 8.5% from its year-ago value to $3.45 billion. Its net income rose 8% from the prior-year quarter to $2.66 billion. Also, the company’s EPS increased 11.5% year-over-year to $4.67.
AMGN’s revenue for its fiscal year 2022 is expected to be $27.09 billion, representing 4.1% year-over-year growth. The company has surpassed the consensus EPS in three of the trailing four quarters. Its EPS is expected to increase at the rate of 12.7% next quarter.
It is no surprise that AMGN has an overall A rating, which equates to a Strong Buy in our POWR Rating system. Also, the stock has an A grade for Quality and a B grade for Stability and Value.
Walgreens Boots Alliance, Inc. (WBA)
WBA is an integrated pharmacy, healthcare, and retailer that operates through two segments: the United States and International. The Deerfield, Ill.-based company’s segments provide retail drugstores, care clinics, specialty pharmacy services, and optical practices. WBA’s retail and business brands portfolio includes Walgreens, Duane Reade, Boots, and global health and beauty product brands.
Last month, WBA acquired the remaining 30% share of McKesson Corporation’s GEHE Pharma Handel (GEHE) and Alliance Healthcare Deutschland (AHD) joint venture. Through this acquisition, WBA should strengthen its position in the pharmaceutical wholesaler sector to improve its innovative services to manufacturers and pharmacists in Germany.
WBA’s sales increased 12.8% year-over-year to $34.26 billion for its fiscal fourth quarter ended August 31, 2021. The company’s gross profit grew 18.6% from its year-ago value to $7.5 billion. Its operating income rose 49.7% from the prior-year quarter to $910 million. Also, the company’s net earnings increased 72.2% year-over-year to $613 million.
Analysts expect WBA’s revenue for the fiscal year 2023 to be $135.45 billion, representing 4.3% growth year-over-year. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Also, its EPS is expected to grow 20.2% in the current quarter. Its stock price has increased 13.7% over the past year.
WBA’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. Also, the stock has a B grade for Growth and Value.
In addition to the POWR Rating grades I have just highlighted, one can see WBA’s ratings for Quality, Stability, Sentiment, and Momentum here. WBA is ranked #2 of 4 stocks in the A-rated Medical – Drug Stores industry.
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UNH shares were trading at $445.43 per share on Thursday morning, up $1.09 (+0.25%). Year-to-date, UNH has gained 28.39%, versus a 23.05% rise in the benchmark S&P 500 index during the same period.
About the Author: Priyanka Mandal
Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research. More...
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