Do you ever wonder how large companies keep posting solid numbers despite the fact the economy is slowing and the consumer price index has hung right near the 5% year-over-year level? They keep raising prices, and for the most part, consumers have absorbed the constantly rising cost of products and services. Many of the biggest companies in the world say they will continue the increases to prop up corporate profits.
There will of course be a point where income does not keep up with inflation (which has actually already started), and demand will start to slow. That is a likely scenario for the second half of 2023. Pepsi raised its snack prices by 16% in the first quarter, and while demand slowed some, the price increases were more than enough to hold profit margins intact.
We screened our 24/7 Wall St. research value and income database for companies that typically do not feel as much pressure from rising input costs and found seven that make good sense for growth and income investors. All have stocks rated Buy at major Wall Street firms, but it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Cisco
Investors who are more conservative may want to consider this mega-cap tech leader, which recently posted outstanding quarterly results. Cisco Systems Inc. (NASDAQ: CSCO) designs, manufactures and sells internet protocol (IP) based networking products and services related to the communications and information technology industry worldwide.
Cisco provides switching products, including fixed-configuration and modular switches, and storage products that provide connectivity to end users, workstations, IP phones, wireless access points and servers, as well as next-generation network routing products that interconnect public and private wireline and mobile networks for mobile, data, voice and video applications.
Its cybersecurity products give clients the scope, scale and capabilities to keep up with the complexity and volume of threats. Putting security above everything helps corporations innovate while keeping their assets safe.
The networking giant posted solid results for the first quarter of fiscal 2023, solidly beating earnings expectations and offering positive forward guidance.
Investors receive a 3.14% dividend. Raymond James has a $64 target price on Cisco Systems stock. The $55.76 consensus target is closer to Friday’s close of $50.02 a share.
CMS Energy
This utility offers a product that is always in demand. CMS Energy Inc. (NYSE: CMS) operates as an energy company primarily in Michigan. It serves 1.9 million electric and 1.8 million gas customers, including residential, commercial and diversified industrial customers.
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