Nobody was really surprised when the August consumer price index showed yet another month of rising prices. While the headline number has decreased since June (mostly due to lower gasoline prices), consumers are still getting stung by inflation. With top Wall Street firms raising their September federal funds increase forecasts to 75 basis points last week, and the year-end terminal rate to 4.00% to 4.25%, it is a safe bet that it will be rough for stock investors in the near term.
Mortgage applications have dropped to their lowest levels in 22 years, as interest rates are the highest to buy a home since 2008. That is a sure sign that clouds are forming. So, what should investors do now? Seek out companies that can continue to do business as usual, those that will not be stung by inflation and will pay big dividends, and that have stocks rated Buy by top Wall Street firms. We found seven that make good sense now.
However, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Chesapeake Energy
This is a very safe energy stock for worried investors who feel the market may have a serious downdraft. Chesapeake Energy Corp. (NYSE: CHK) an independent exploration and production company focused on oil, natural gas and natural gas liquids (NGLs) from underground reservoirs in the United States.
The company holds interests in natural gas resource plays in the Marcellus Shale in the northern Appalachian Basin in Pennsylvania and the Haynesville/Bossier Shales in northwestern Louisiana, as well as the liquidsich resource play in the Eagle Ford Shale in South Texas.
As of December 31, 2021, it owned interests in approximately 8,200 gross productive wells, including 6,500 wells with working interest and 1,700 wells with an overriding or royalty interest, and it had estimated proved reserves of 661 million barrels of oil equivalents.
Shareholders receive a 6.88% dividend. Wells Fargo has a $130 price target on Chesapeake Energy stock. The consensus target is even higher at $143.17, and shares ended Monday’s trading session at $103.83.
Foot Locker
Shares of this athletic shoe retailer have rallied from lows and look ready to move higher. Foot Locker Inc. (NYSE: FL) engages in the retail of athletic footwear, apparel, accessories, equipment and team licensed merchandise under the Foot Locker, Lady Foot Locker, Kids Foot Locker, Champs Sports and other brand names.
As of January 29, 2022, it operated 2,858 retail stores in 28 countries, including the United States, Canada, Australia and New Zealand, as well as 142 franchised Foot Locker stores located in the Middle East and Asia. The company also offers its products through various e-commerce sites and mobile apps.
Shareholders receive a 4.35% dividend. The Jefferies price objective of $61 is well above the $38.33 consensus target. Foot Locker stock closed over 3% higher on Monday at $39.54.
Gilead Sciences
This stock is trading at a very reasonable 9.05 times estimated 2022 earnings and has big-time upside potential. Gilead Sciences Inc. (NASDAQ: GILD) is a research-based biopharmaceutical company that discovers, develops and commercializes medicines in the areas of unmet medical need in the United States, Europe and elsewhere.
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