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2 Stock to Buy When There’s Economic Turmoil

Although inflation eased off from the 40-year high in July, it is far from the Fed’s target level. Moreover, the soaring tensions on the geopolitical front could keep the market under pressure. Amid the challenging macroeconomic environment, it could be best to invest in well-established stocks, Coca-Cola (KO) and Walmart (WMT), given their solid fundamentals. Read on…

Stocks rose sharply in the last trading session, with the S&P 500 adding 2.1% to hit its highest level since early May, the Dow Jones jumping 535.10 points, and the Nasdaq Composite gaining 2.9% to 12,854.80, its highest close since late April. This was driven by the latest inflation report that indicated a slowing pace of the price increases. Inflation rose 8.5% in July, slightly cooler than the analysts’ expectation of 8.7%.

However, Fed officials expect to continue to tighten monetary policy until price pressures are fully broken. The Fed is “far, far away from declaring victory” on inflation, Minneapolis Federal Reserve Bank President Neel Kashkari said. Moreover, strength in job growth and wages is prompting the Fed to hold on to its aggressive stance.

Furthermore, the situation remains tense on the geopolitical front, with no end in sight to the Ukraine war, and the escalating tension between China and Taiwan could worsen the macroeconomic challenges.

Given these uncertain times, investors should consider adding these rock-solid stocks, The Coca-Cola Company (KO) and Walmart Inc. (WMT), to their portfolios now.

The Coca-Cola Company (KO)

KO manufactures, markets, and sells various non-alcoholic beverages worldwide. 

On June 13, KO announced a global relationship with Brown-Forman Corporation to debut the iconic Jack & Coke cocktail as a branded, ready-to-drink (RTD) pre-mixed cocktail option. This should be widely in demand, given its brand popularity.

KO’s net operating revenues increased 12% year-over-year to $11.33 billion in the fiscal quarter ended July 1, 2022. Gross profit for the quarter came in at $6.50 billion, up 2% from its year-ago value.

Street expects KO’s revenue for the fiscal quarter ending December 2022 to come in at $9.93 billion, indicating a 4.8% year-over-year increase. Its EPS is expected to improve 6.3% year-over-year to $0.48. The company beat the consensus EPS estimates in three of the trailing four quarters.

Over the past year, the stock has gained 11.3% to close the last trading session at $63.65.

KO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, translating to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

KO is also rated B in Sentiment, Stability, and Quality. Within the A-rated Beverages industry, it is ranked #19 of 34 stocks. Click here to see additional POWR Ratings for Growth, Value, and Momentum for KO.

Walmart Inc. (WMT)

WMT engages in the operation of retail, wholesale, and other units worldwide. The company operates through three segments Walmart U.S.; Walmart International; and Sam’s Club.

On August 10, WMT announced that it would open a 400,000 square-foot high-tech consolidation center in Lebanon, Pa, with nearly 1,000 additional jobs in the area. The facility will leverage automated technology to add efficiency to Walmart’s supply chain. This development should prove to be strategically beneficial for the company.

On July 28, WMT and Getaway, a health and wellness hospitality company, announced a partnership that designates Walmart as Getaway’s first official retail partner to introduce general stores at select Getaway Outposts coming this fall. This new alliance will help Getaway’s guests live better by making traveling to nature easier and more convenient. 

“Walmart’s partnership with Getaway furthers our mission to help people Live Better no matter where they are,” said Casey Schlaybaugh, Vice President, Brand Marketing, Walmart U.S.

WMT’s total revenues increased 2.4% year-over-year to $141.57 billion in the fiscal quarter ended April 30, 2022. Net cash provided by financing activities came in at $5.32 billion, up 198.4% year-over-year in the same period.

Analysts expect WMT’s revenue for the fiscal quarter ended July 2022 to come in at $149.78 billion, indicating an increase of 7.1% year-over-year. Also, the company’s revenue is expected to grow 4.6% year-over-year to $593.6 in the ongoing fiscal year.

WMT gained 3% over the past month to close the last trading session at $128.58.

WMT’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, equating to Buy in our proprietary rating system.

The company also has a B grade in Stability. Out of the 38 stocks in the A-rated Grocery/Big Box Retailers industry, WMT is ranked #21. Click here to get WMT’s ratings for Momentum, Sentiment, Value, Quality, and Growth.

KO shares were trading at $63.87 per share on Thursday afternoon, up $0.22 (+0.35%). Year-to-date, KO has gained 9.48%, versus a -10.29% rise in the benchmark S&P 500 index during the same period.

About the Author: Komal Bhattar

Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.


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