Consumer staples stocks like Newell tend to be solid ideas in times of inflation and rising rates. In 2021, the company’s cash distributions to shareholders were close to $400 million. During the period, Newell produced roughly $600 million, which included an abnormally large $350 million in cash spent on an inventory buildup, which the company attributed to preparation for sales growth. With a dividend payout ratio below 70%, Newell should continue to easily support the large and tempting dividend.
Shareholders receive a 7.07% dividend. Newell Brands has a Strong Buy rating at Raymond James. Its $17 price target compares with the $16.09 consensus. On Tuesday, shares closed over 3% higher at $12.18.
Walgreens
This huge drugstore chain operator is a safe retail play for investors looking to add health care now, and it trades at a cheap 7.5 times 2023 earnings expectations. Walgreens Boots Alliance Inc. (NASDAQ: WBA) operates as a pharmacy-led health and beauty retail company. It operates through three segments.
The Retail Pharmacy USA segment sells prescription drugs and an assortment of retail products, including health, wellness, beauty, personal care, consumable, and general merchandise products through its retail drugstores. It also provides specialty pharmacy services and mail services; this segment operates nearly 10,000 retail stores under the Walgreens and Duane Reade brands in the United States; and six specialty pharmacies.
The Retail Pharmacy International segment sells prescription drugs and health and wellness, beauty, personal care and other consumer products through its pharmacy-led health and beauty stores and optical practices, as well as online and an integrated mobile application. This segment operated 4,428 retail stores under the Boots, Benavides and Ahumada in the United Kingdom, Thailand, Norway, the Netherlands, Mexico and elsewhere, and 550 optical practices, including 165 on a franchise basis.
The Pharmaceutical Wholesale segment engages in the wholesale and distribution of specialty and generic pharmaceuticals, health and beauty products, and home health care supplies and equipment, as well as provides related services to pharmacies and other health care providers.
Walgreens Boots Alliance stock investors receive a 5.77% dividend. Loop Capital recently started coverage with a $45 target price. The consensus target is $41.58, and Tuesday’s close was at $33.29.
While Wilson might be considered a perma-bear by some on Wall Street, his rationale for being negative makes sense. Earnings are expected to plunge as the year progresses, the effects of rising interest rates will be felt more and more, consumer debt is skyrocketing, and delinquent accounts that are missing payments on debt are as well. Like choosing a bank these days, the bigger the better, and these stocks all fall in the bigger category.
Originally published at 24/7 Wall St.
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