Investor sentiments have been improving amid the falling inflationary pressures and a tight labor market. Moreover, the odds of a soft landing are rising. Given the growing optimism, investors could consider adding quality stocks Comcast (CMCSA) and Dow (DOW) to their 2023 watchlist. Keep reading….
Inflation in December 2022 slid further after a consecutive decline in October and November. Prices increased by 6.5%, marking the slowest inflation rate in more than a year. In addition, the job market remains tight, adding 223,000 jobs in December, higher than expected.
Amid favorable macro data, Peter Essele, head of portfolio management for Commonwealth Financial Network, believes, “The likelihood of a soft landing is probably greater now than it was in the past 12 months.”
Furthermore, investor pessimism dropped to its lowest level in 10 weeks, according to the latest AAII Sentiment Survey. Bullish sentiment, expectations that stock prices will rise over the next six months, rose 3.5 percentage points to 24%.
Given the backdrop, we think quality stocks Comcast Corporation (CMCSA) and Dow Inc. (DOW) could be solid additions to your 2023 watchlist.
Comcast Corporation (CMCSA)
CMCSA operates as a media and technology company worldwide. It runs through Cable Communications; Media; Studios; Theme Parks; and Sky segments.
On December 12, 2022, CMCSA launched the world’s first live, multigigabit symmetrical Internet connection powered by 10G and Full Duplex DOCSIS 4.0. 10G technology. This technology comes with next-level net speed and performance, offering customers a worthwhile internet experience.
CMCSA has paid dividends for 13 consecutive years. Its dividend payouts have increased at 8.7% CAGR over the past three years. Its current dividend yield is 2.79%, while its four-year average yield is 2.09%.
CMCSA’s Cable Communications revenue came in at $16.54 billion for the third quarter that ended September 30, 2022, up 2.6% year-over-year. Its adjusted net income came in at $4.22 billion, up 4.5% year-over-year, while its adjusted EPS came in at $0.96, up 10.3% year-over-year. Also, its adjusted EBITDA came in at $9.48 billion, up 5.9% year-over-year.
CMCSA’s revenue is expected to increase marginally year-over-year to $30.36 billion for the yet-to-be-reported quarter ending December 2022. Its EPS is expected to increase by 8.9% per annum for the next five years. It surpassed EPS estimates in all four trailing quarters. The stock has gained 5.9% over the past month and 34.9% over the past three months to close the last trading session at $38.69.
CMCSA’s POWR Ratings reflect this promising outlook. It has an overall B rating representing a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
CMCSA has a B grade for Quality. It is ranked first among the nine stocks in the Entertainment – TV & Internet Providers industry. Click here to see the additional ratings for CMCSA for Value, Momentum, Stability, and Sentiment.
Dow Inc. (DOW)
DOW provides various materials science solutions for packaging, infrastructure, mobility, and consumer applications in the United States, Canada, Europe, the Middle East, Africa, India, the Asia Pacific, and Latin America. It operates through Packaging & Specialty Plastics; Industrial Intermediates & Infrastructure; and Performance Materials & Coatings segments.
On December 14, 2022, DOW and USA Luge announced the extension of their collaboration. DOW will be the Official Technical Partner of the USA Luge team through 2026. Both organizations aim to combine science and speed with improving sled performance. DOW is expected to benefit significantly over the long term.
DOW has paid dividends for three consecutive years. Its dividend payouts have increased at 10.1% CAGR over the past three years. Its current dividend yield is 4.78%, while its four-year average yield is 4.66%.
DOW’s Performance Materials & Coatings segment revenue came in at $2.65 billion for the third quarter that ended September 30, 2022, up 5.1% year-over-year. Its revenue from Latin America came in at $1.58 billion, up marginally year-over-year.
Street expects DOW’s revenue to increase 4% year-over-year to $57.18 billion for the yet-to-be-reported fiscal 2022. It surpassed EPS estimates in all four trailing quarters. The stock has gained 14.5% over the past month and 33.6% over the past three months to close the last trading session at $58.52.
DOW’s overall B rating represents a Buy in our POWR Ratings system. It has a B grade for Value and Quality. It is ranked #37 out of 89 stocks in the B-rated Chemicals industry. To see the additional POWR Ratings for DOW (Growth, Momentum, Stability, and Sentiment), click here.
CMCSA shares fell $0.39 (-1.01%) in premarket trading Friday. Year-to-date, CMCSA has gained 10.37%, versus a 2.87% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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