Although inflation has been showing signs of easing, it continues to hover way above the Fed’s 2% target. Since the Fed is expected to continue raising interest rates until its target is reached, the stock market is expected to remain volatile. Amid this backdrop, investors could consider investing in quality stocks, Honda Motor (HMC), Gilead (GILD), and Sisecam (SIRE), which pay reliable dividends. Keep reading….
Inflation closed out 2022 in a modest retreat, with the consumer price index (CPI) accelerating 6.5% year-over-year in December, down from 7.1% in November and a 9.1% peak hit in June last year. Despite the significant slowdown in price increases, inflation continues to hover way above the Fed’s target of 2%.
According to Richmond Fed president Thomas Barkin, with the inflation slowing down considerably, the central bank doesn’t need to increase interest rates as aggressively as it did last year. However, he warns of still-high median inflation and sees the rate path as “slower, but longer and potentially higher.”
A favorable December CPI report is likely to keep the Fed on track to reduce the size of the rate hike to 25 basis points at its meeting on February 1. Although cooling inflation bolsters hopes that the U.S. economy can avert a recession, markets are still expected to remain highly volatile in the near future since Fed policymakers signal a rate-hike slowdown but no pause this year.
Amid an uncertain market backdrop, fundamentally sound, dividend-paying stocks Honda Motor Company, Ltd. (HMC), Gilead Sciences, Inc. (GILD), and Sisecam Resources LP (SIRE) could be ideal investments to ensure a stable income stream.
Honda Motor Company, Ltd. (HMC)
Headquartered in Tokyo, Japan, HMC develops, manufactures, and distributes motorcycles, automobiles, power products, and other products in Japan, North America, Europe, Asia, and internationally. Its four segments include Motorcycle Business; Automobile Business; Financial Services Business; and Life Creation and Other Businesses.
On December 8, 2022, HMC’s Honda Motor (China) Investment Co., Ltd signed a battery-for-electric-vehicle deal with Contemporary Amperex Technology Co Limited. As per the contract, Honda would buy 123 GWh of batteries from CATL for use in China’s pure electric vehicles between 2024 and 2030.
The battery supply contract will guarantee Honda a long-term supply of batteries amid current supply chain headwinds in the economy.
In October, HMC and LG Energy Solution announced plans to build a new joint venture battery plant in Fayette County, Ohio, and intend to invest $3.5 billion and create 2,200 jobs. The firm aims to invest in a workforce that will provide the power source for future Honda and Acura electric vehicles. It has set a goal of having battery-electric and fuel-cell electric vehicles account for 100% of its vehicle sales by 2040.
HMC’s sales revenue increased 25% year-over-year to ¥4.26 trillion ($32.61 billion) for the quarter that ended September 30, 2022. Its operating profit grew 16.2% year-over-year to ¥231.20 billion ($1.77 billion). In addition, the company’s profit rose 13.6% year-over-year to ¥189.20 billion ($1.45 billion).
Over the last five years, HMC’s dividend payouts have grown at a 1.2% CAGR. While HMC’s four-year average dividend yield is 3.39%, its current dividend translates to a 3.90% yield annually.
Analysts expect HMC’s revenue to increase 10.2% year-over-year to $143.73 billion for the fiscal year ending March 2024. The company’s EPS for the next year is expected to grow 24.6% year-over-year to $3.02. HMC has surpassed the consensus revenue estimates in each of the four trailing quarters.
Over the past month, the stock has gained 1.1% to close the last trading session at $24.10.
HMC’s strong fundamentals are reflected in its POWR Ratings. The stock’s overall A rating translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
It has an A grade for Value and a B for Quality and Stability. The stock is ranked #6 among the 62 stocks in the Auto & Vehicle Manufacturers industry.
Beyond the grades above, we’ve also rated HMC for Momentum, Sentiment, and Growth. Get all HMC ratings here.
Gilead Sciences, Inc. (GILD)
GILD is a biopharmaceutical company focusing on developing and commercializing medicine for treating life-threatening diseases, including HIV, viral hepatitis, and cancer.
On January 3, 2022, GILD announced that the European Medicines Agency (EMA) had validated the Marketing Authorization Application (MAA) for Trodelvy to treat adult patients with pre-treated HR+/HER2- metastatic breast cancer. Given the limited treatment options, this plays a significant role in making Trodelvy accessible to more patients across the European Union (EU).
On the same day, GILD, and EVOQ Therapeutics, Inc. announced a collaboration and licensing agreement to advance EVOQ’s proprietary technology for treating rheumatoid arthritis (RA) and lupus. Under the agreement, GILD would receive the rights to exclusively license EVOQ’s NanoDisc technology to develop and commercialize immunotherapy products clinically.
GILD has a record of seven years of consecutive dividend growth. The company pays an annual dividend of $2.92, which yields 3.41% at the current price level. Its dividend payouts have increased at a 5% CAGR over the past three years and a 7% CAGR over the past five years.
GILD’s total product sales, excluding Veklury, increased 11% year-over-year to $6.05 billion for the fiscal third quarter that ended September 30, 2022. The company’s HIV product sales increased 7% year-over-year to $4.49 billion, and its oncology sales rose 79% from the prior-year period to $578 million.
As of September 30, 2022, GILD’s current liabilities were $62.56 billion, compared to $67.95 billion as of December 31, 2022.
For the quarter that ended December 31, 2022, GILD’s EPS is expected to increase 116% year-over-year to $1.49. Moreover, the company has surpassed the consensus EPS estimates in three of the trailing four quarters. The stock has gained 37.5% over the past six months and 18.6% over the past year to close the last trading session at $85.72.
It is no surprise that GILD has an overall A rating which equates to a Strong Buy in our POWR Ratings system.
GILD has an A grade for Value and a B for Sentiment and Quality. Out of the 396 stocks in the Biotech industry, it is ranked #4.
Click here to see the other ratings of GILD for Growth, Momentum, and Stability.
Sisecam Resources LP (SIRE)
SIRE is engaged in trona ore mining and soda ash production with its facility in the Green River basin of Wyoming. It processes trona ore into soda ash, an essential raw material in flat glass, container glass, detergents, chemicals, paper, and other consumer and industrial products.
For the fiscal third quarter that ended September 30, 2022, SIRE’s net sales increased 40.5% year-over-year to $190.50 million. The company’s operating income rose 295.2% from the year-ago value to $32.80 million, while the adjusted EBITDA attributable to SIRE increased 69.2% year-over-year to $20.30 million.
Also, net income attributable to SIRE grew 108.1% year-over-year to $15.40 million. In addition, its EPS came in at $0.76, up 111.1% year-over-year.
SIRE’s four-year average dividend yield is 7.15%, and its current dividend translates to a 9.61% yield. The company’s dividend payouts have grown at a CAGR of 10.7% over the past three years. It paid a quarterly dividend of $0.50 per share on November 17, 2022.
Shares of SIRE have gained 23.7% over the past six months to close the last trading session at $22.38.
SIRE’s POWR Ratings reflect this promising outlook. The stock has an overall rating of A, translating to a Strong Buy in our proprietary rating system.
SIRE has an A grade for Growth and Quality and a B for Value and Stability. Within the B-rated Chemicals industry, it is ranked first out of 89 stocks.
To access additional POWR Ratings for SIRE (Sentiment and Momentum), click here.
HMC shares fell $0.33 (-1.37%) in premarket trading Friday. Year-to-date, HMC has gained 5.42%, versus a 3.80% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
Your Company’s Responsible Guide to Staying Profitable in a Recession
Opinions expressed by Entrepreneur contributors are their own.
The recent trend of easy money and exorbitant valuations has skidded to a halt amid recent economic volatility. Understandably, many companies rode that wave as long as they could, but in doing so many prioritized growth over sustainability and sound leadership. Layoffs continue to ripple through the tech ecosystem, so employees both in this sector and elsewhere are feeling the consequences.
Having to let go of staff members is all but unavoidable in a company’s lifecycle, but there is always more that can be done to keep businesses afloat while preserving morale. Strategies can include responsible budgetary decision-making, thoughtful and prudent responses to external pressures and transparent dialogue with employees, to name a few. Such actions can help companies remain healthy, productive and profitable, even as they navigate challenging waters.
This is What You Need in Your 5-Year Marketing Plan
Opinions expressed by Entrepreneur contributors are their own.
We’ve all heard the interview question, “Where do you see yourself in five years?” Marketers routinely take that question and apply it to their marketing strategies. They figure out what they want to achieve and then develop actionable steps to get there. Keep in mind, these plans aren’t designed to be all-encompassing. They serve as a guidebook for different scenarios while getting the team thinking about what they’d like to accomplish long-term.
Your five-year plan is a way to build an overarching metric for how you’re doing — or how you plan to do over the next half-decade. There are many things to consider when building your plan — here are a few to look at carefully:
The 3 key buckets
A successful five-year marketing plan should fixate on three main questions:
- What assumptions can you make about the next five years within your company?
- What goals do you want to achieve?
- What are the metrics you’ll use to measure those goals?
Assumptions are what you think won’t change in the business over the next five years. For example, you might assume that you will continue using particular vendors or that packaging costs will remain stable. From there, you can determine your goals — like boosting sales by 50% or converting 10,000 new customers. The metrics that measure your progress might be units sold or your company’s market share. It’s essential to include both readily-accessible metrics — such as website views — and brand metrics that might be a bit harder to come by, such as the associations your customers have made with your products or company.
Importantly, there’s no “right” or “wrong” when it comes to answering these questions. Every business has its own vision, resources and position, which all influence its marketing strategy. The aim is to develop a plan that will produce the most desirable outcome for you, rather than worrying about what other businesses have the capacity to do.
Related: Use These 5 Steps to Create a Marketing Plan
Narrowing your focus
Just like consumer preferences, marketing tactics are constantly shifting. Social media demonstrates this well. Because social media platforms have skyrocketed over the past two decades, marketers no longer rely solely on traditional platforms such as print or television ads. And even within social media, things aren’t constant. TikTok has become one of the fastest-growing platforms, quickly overtaking Facebook.
With so many options, your marketing plan must keep a narrow focus. For some companies, TikTok doesn’t matter. They can’t yet measure the return they’re getting from the platform, so this isn’t exactly a feasible opportunity. Don’t be tempted to try everything or be everywhere. It’s a matter of isolating what you practically can use to give you the insights that will help you.
Two questions will help focus your strategy:
- How do your goals compare to last year?
- What are you striving for (e.g., enhancing the brand vs. increasing brand awareness)?
How you answer those questions will help you identify where and how to focus your efforts so you don’t get lost in a bunch of small, irrelevant tactics.
Using your budget
Most people think of budgets as being stable or hard data — but almost all companies work with unknowns. In reality, the best they can do is come up with an educated guess that seems to make sense – a ballpark range. Because nobody can plan with certainty for every scenario — and because it’s so easy to become overwhelmed with an infinite range of outcomes — it’s advisable to lean on a few key financial assumptions and build a strategy around those.
Once you have a budget figure to work with, create high and low projections for everything you want to do. Let’s say the aim is to get to 50% brand awareness. What would your plan look like if you exceeded that and got to 75%? Alternatively, what would you do if awareness went down to 25%? Creating these high and low projections will let you design a more flexible approach and avoid being caught too off guard.
As you come up with your main scenarios and high-low projections, think about the key internal drivers you’ll need to address next year. Consider the risks, and assess whether you’ll have the data, technology and skills to develop and maintain what you expect to put forward. Keep in mind that it’s more important to pivot when issues come up than to predict what’s going to happen accurately.
Related: 4 Tips for Developing a Marketing Plan That Will Actually Grow Your Business
Paint flexibly within your broad strokes
A five-year marketing plan paints a broad, long-term picture of how you’ll communicate with your audience while giving details about your projected products or services. It includes assumptions and factors that aren’t necessarily static, so you have to approach it with a grain of salt and be ready to shift gears if the plan doesn’t work.
Even so, if you stick to three key buckets (assumptions, goals and metrics), keep your tactical focus narrow and incorporate multiple projections in your budget, you should end up with a strategy that blends the data and flexibility needed to strive in a changing world. Because annual marketing plans need to connect to your long-term marketing vision, let the annual marketing meetings serve as check-in points to keep your longer-term marketing plan relevant and viable.
Lauren Sánchez Is Heading to Space on a Girls Trip
Sorry, Jeff — this one is for the girls.
Jeff Bezos’ girlfriend, Lauren Sánchez, said in a new interview with the Wall Street Journal that she planned to take an all-female trip to space with the Amazon founder’s space manufacturing company, Blue Origin.
Five women will join her on the journey.
“It’s going to be women who are making a difference in the world and who are impactful and have a message to send,” she told the outlet.
The mission is set for early 2024, and the passengers’ names will be announced at a later date.
The WSJ’s report was Sánchez’s first solo interview, the outlet noted, since her relationship with Bezos went public in 2019, shortly after his divorce announcement from now ex-wife, MacKenzie Scott.
The interview also talks about Sánchez’s relationship with Bezos and the business advice he’s given her (keeping meetings under an hour, speaking last as a boss).
Sánchez is a former broadcast journalist and a helicopter pilot who founded her own filming company Black Ops Aviation, per Insider.
“Right now, I’m immersing myself in philanthropy and strategic giving,” she told the outlet. She also has a new production company, Adventure & Fellowship.
Bezos and Sánchez also work together on picking the winner for the Bezos Award for Courage & Civility, which was awarded to Dolly Parton in 2022, giving her $100 million to dole out to charities as she pleased.
But don’t expect Bezos to crash the girls’ trip. “He’ll be cheering us all on from the sidelines,” Sánchez said, adding that Bezos is “excited to make this happen with all of these women… He’s very encouraging and excited, and he’s thrilled we’re putting this group together.”
Sánchez’s nonprofit work includes This Is About Humanity, which helps give supplies to kids separated from their parents at the U.S.-Mexico border, supporting the Bezos Earth Fund, which fights climate change, and working with the Bezos Academy, a system of free Montessori schools.
Bezos told CNN in an exclusive that aired in mid-November that, like many other billionaires have pledged to do, he would give away most of his money.
Ex-wife Scott, meanwhile, has donated over $14 billion since 2019, much of it coming from the settlement with Bezos.
Bezos has always planned on giving his money away, Sánchez told the outlet.
“Jeff has always told me since I’ve known him that he’s going to give the majority of his money to philanthropy,” she said.
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