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4 Stocks for Investors Over 40 to Buy and Hold

With the rising odds of a recession next year, elevated inflation, and the Fed’s hawkish monetary policy stance, the stock market will likely remain under pressure. It, therefore, could be ideal to invest and hold fundamentally sound stocks Verizon Communications (VZ), Humana (HUM), Archer-Daniels-Midland (ADM), and Sysco Corp. (SYY) for investors over 40. Let’s discuss…

The stock market is under tremendous pressure as interest rates rise and inflation remains high despite a slight cool-off. Moreover, the benchmark indexes plunged as the policymakers revised their outlook for economic growth in 2023 downward from the 1.2% forecast in September to 0.5%.

Given the pace and intensity of Fed tightening, there is a strong likelihood that the U.S. will tip into a recession next year. But thanks to solid household balance sheets and resilient consumption, many analysts expect it to be ‘mild.’

With the markets facing strong macroeconomic headwinds, dividend-paying stocks backed with impressive balance sheets and strong fundamentals are gaining traction as investors look for defensive options. Investing in quality dividend stocks can garner steady passive income in any economic condition.

Therefore, Verizon Communications Inc. (VZ), Humana Inc. (HUM), Archer-Daniels-Midland Company (ADM), and Sysco Corporation (SYY) could be ideal portfolio additions for investors over 40 to ensure a stable income stream.

Verizon Communications Inc. (VZ)

VZ offers communication, information, and entertainment products and services to consumers, businesses, and governmental agencies. The company operates through two segments: Consumer Group; and Business Group, providing wireless and wireline communications services and products in the United States.

In December, VZ continued to spread holiday cheer by deploying connectivity solutions to help NORAD track Santa Claus’ whereabouts on Christmas Eve. With the rapid expansion of 5G service across the nation, VZ covers more than 175 million people with 5G Ultra-Wideband service, allowing NORAD volunteers to connect faster and with more people for their Santa initiative.

On November 15, VZ launched an advanced technology in its stores ahead of the holidays to give its customers an all-new exciting experience in tech shopping. Vivek Gurumurthy, CIO and Senior Vice President, VZ Global Technology Solutions, Consumer, said, “We are equipped to serve customers by creating a seamless retail experience that is tailored to you and can be continued as an Omni experience in any other channel of choice.”

On December 1, VZ declared a quarterly dividend of $0.65 per outstanding share, payable on February 1, 2023. It pays a $2.61 per share dividend annually, which translates to a 7.06% yield on the current price. Its four-year average dividend yield is 4.65%. Its dividend payments have grown at CAGRs of 2% and 2.1% over the past three and five years, respectively.

During the third quarter ended September 30, 2022, VZ’s total operating revenues grew 4% year-over-year to $34.24 billion. Its wireless equipment revenues rose 22.9% from the year-ago value to $6.56 billion. Also, its total assets came in at $375.09 billion for the quarter ended September 30, 2022, compared to $366.60 billion for the fiscal year ended December 31, 2021.

The consensus revenue estimate of $35.30 billion for the fourth quarter ending December 31, 2022, indicates a 3.6% increase year-over-year. Its EPS is expected to increase by 2.2% per annum over the next five years. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in three of the trailing four quarters.

The stock has lost 4.1% over the past month to close the last trading session at $36.99.

VZ’s POWR Ratings reflect this promising outlook. It has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

It has a B grade for Growth and Stability. Out of 19 stocks in the Telecom - Domestic industry, it is ranked #3. Click here to see the additional VZ ratings for Value, Momentum, Sentiment, and Quality.

Humana Inc. (HUM)

HUM operates as a health and well-being company through three segments: Retail, Group and Specialty, and Healthcare Services. The company offers medical and supplemental benefit plans to individuals. It also provides insured medical and specialty health insurance benefits and pharmacy solutions.

On October 7, HUM announced that its Kentucky HMO plan had received the prestigious 5-star rating from the Centers for Medicare and Medicaid Services (CMS) for the second year in a row. This achievement reflects the company’s strong collaboration with local health providers and dedication to delivering the best health outcomes for its members.

HUM pays a $3.15 per share dividend annually, which translates to a 0.63% yield on the current price. Its four-year average dividend yield is 0.65%. Its dividend payments have grown at CAGRs of 12.5% and 15.5% over the past three and five years, respectively. On October 27, the company declared a cash dividend of $0.79 per share, payable on January 27, 2023.

In the third quarter ended September 30, 2022, HUM’s total revenue increased 10.2% year-over-year to $22.80 billion. Its non-GAAP pre-tax income increased 42.5% from the year-ago value to $1.14 million, while its non-GAAP EPS came in at $6.88, representing a 42.4% year-over-year improvement.

The consensus EPS estimate of $1.50 for the fiscal fourth quarter (ending December 2022) represents a 21.2% improvement year-over-year. The consensus revenue estimate of $22.44 billion for the current quarter represents a 6.6% increase from the same period last year. HUM surpassed the EPS estimates in each of the trailing four quarters, which is excellent.

The stock has gained 17.1% over the past six months to close the last trading session at $501.72.

HUM’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of A, equating to a Strong Buy in our proprietary rating system. It has a B grade for Growth, Value, and Quality. The stock is ranked #3 of 11 in the A-rated Medical - Health Insurance industry.

Click here to see the other HUM ratings for Momentum, Stability, and Sentiment.

Archer-Daniels-Midland Company (ADM)

ADM procures, transports, stores, processes, and merchandises agricultural commodities, products, and ingredients worldwide. The company has three operational segments, Ag Services and Oilseeds; Carbohydrate Solutions; and Nutrition. It acquires, stores, cleans, and transports agricultural raw materials, such as oilseeds, corn, wheat, milo, oats, and barley.

On December 12, ADM was recognized as a ‘Diversity Leader 2023’ by the Financial Times and was also named as one of the best-managed companies in the U.S. according to the Wall Street Journal’s annual Management Top 250 ranking. This reflects the company’s exceptional performance and constant commitment amid a challenging global environment.

On September 14, ADM and PepsiCo, Inc. (PEP) announced a groundbreaking 7.5-year strategic commercial agreement to collaborate closely on projects that aims to significantly expand regenerative agriculture across their shared North American supply chains.

This partnership between two global companies with large footprints provides an unprecedented and unique opportunity to expand regen ag at scale.

ADM’s four-year average dividend yield is 2.76%, and its current dividend translates to a 1.72% yield. Its dividends have grown at a 4.6% CAGR each over the past three and five years. The company has been paying dividends for 29 consecutive years. On December 7, the company paid a cash dividend of $0.40 per share on its common stock.

For the third quarter ending September 30, 2022, ADM’s revenues increased 21.4% year-over-year to $24.68 billion. Its gross profit grew 36.6% from its year-ago value to $1.81 billion, while its adjusted net earnings increased 91.2% year-over-year to $1.05 billion. Also, its adjusted EPS improved 91.8% from its prior-year quarter to $1.86.

Street expects ADM’s EPS and revenue for the quarter ending December 31, 2022, to increase 9.5% and 9.1% year-over-year to $1.64 and $25.20 billion, respectively. Moreover, it has an impressive earnings history as it surpassed the EPS estimate in each of the trailing four quarters.

Shares of ADM have gained 44.7% over the past year to close its last trading session at $92.94.

ADM has an overall rating of A, which translates to Strong Buy in our proprietary rating system. Also, it has an A grade for Growth and a B for Sentiment. Among the 28 stocks in the Agriculture industry, it is ranked #3.

Beyond what we’ve stated above, we have also given ADM grades for Value, Momentum, Stability, and Quality. Get all ADM ratings here.

Sysco Corporation (SYY)

SYY distributes food and related products primarily to the food service or food-away-from-home industry. It operates through four segments: U.S. Foodservice; International Foodservice; SYGMA; and Other. The company serves restaurants, healthcare, and educational facilities, lodging establishments, and other customers who prepare meals away from home.

On November 11, the company received its first series-produced battery electric Freightliner eCascadia. Earlier this year, SYY and DTNA, the leading North American heavy-duty truck manufacturer, announced plans to deploy up to 800 battery electric Freightliner eCascadias by 2026.

The deployment of Freightliner eCascadias, along with electric refrigerated trailers, should strengthen SYY’s role in transforming the future of food service delivery.

On November 17, SYY’s Board of Directors declared a quarterly cash dividend of $0.49 per share, payable to shareholders on January 27, 2023. Its four-year average dividend yield is 2.41%, and its forward annual dividend translates to a 2.50% yield. Its dividends have grown at 7.2% and 7.8% CAGRs over the past three and five years, respectively.

In the fiscal first quarter ended October 1, 2022, SYY’s net sales increased 16.2% year-over-year to $19.13 billion. Its non-GAAP operating income increased 12.4% from the year-ago value to $770.27 million, while its non-GAAP net earnings grew 14.6% year-over-year to $492.60 million.

The company’s EPS came in at $0.97, representing a 16.9% year-over-year improvement. Also, its adjusted EBITDA increased 7.5% from the prior-year quarter to $916.87 million.

Analysts expect SYY’s EPS and revenue to increase 43.8% and 13.9% year-over-year to $0.82 and $18.59 billion in the current quarter ending December 31, 2022. Over the past year, the stock has gained 9.9% to close yesterday’s trading session at $78.28.

SYY’s solid prospects are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

It has an A grade for Growth and a B for Value and Stability. Within the B-rated Food Makers industry, it is ranked #5 of 83 stocks.

To see the additional POWR Ratings of SYY for Momentum, Sentiment, and Quality, click here.


VZ shares were trading at $37.71 per share on Wednesday afternoon, up $0.72 (+1.95%). Year-to-date, VZ has declined -23.45%, versus a -17.42% rise in the benchmark S&P 500 index during the same period.



About the Author: Shweta Kumari

Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.

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