The company’s marketplace stores offer full-service grocery, pharmacy, health and beauty care, and perishable goods, as well as general merchandise, including apparel, home goods, and toys. The price impact warehouse stores provide grocery and health and beauty care items, as well as meat, dairy, baked goods and fresh produce items.
The company also manufactures and processes food products for sale in its supermarkets and online, and it sells fuel through 1,613 fuel centers. As of January 29, 2022, the company operated 2,726 supermarkets under various banner names in 35 states and the District of Columbia.
Shareholders receive a 1.67% dividend. The BofA Securities target price is $75. The consensus target for Kroger stock is just $55.29. The last trade on Wednesday was reported at $51.16 a share.
McDonald’s
The legacy fast-food heavyweight is a solid pick when the economy goes south, and it is among the safest large-cap restaurant plays. McDonald’s Corp. (NYSE: MCD) operates and franchises McDonald’s restaurants in the United States and internationally.
The company’s restaurants offer hamburgers and cheeseburgers, chicken sandwiches and nuggets, wraps, fries, salads, oatmeal, shakes, desserts, sundaes, soft serve cones, bakery items, soft drinks, coffee, and other beverages, as well as a breakfast menu, including biscuit and bagel sandwiches, breakfast burritos, hotcakes and other sandwiches. As of December 31, 2021, the company operated 40,031 restaurants.
McDonald’s earnings jumped a strong 19% a beat estimates in the most recent period. Revenue rose 10% to $5.67 billion, also topping forecasts. In addition, same-store sales, which is a huge metric for the company, jumped 11.8%. While that number represented a big drop from prior quarters, it was much better than gloomy Wall Street expectations. U.S. comparison rose 3.5%, barely eclipsing the consensus target.
The dividend yield is 2.32% dividend. UBS has a Wall Street leading $290 target price. The consensus target of $279.09 is also well above the $244.01 per share close for McDonald’s stock on Wednesday.
Bannister does not anticipate a recession until 2023, and that could be averted if the Federal Reserve pauses the interest rate path that has been set out to tamp down the current spiraling inflation. That path includes two 50 basis point increases, in June and July, and possibly more of at this level at scheduled meetings for the rest of 2022.
Even if we do fall into a recession, the Stifel research notes that we are in the best U.S. jobs market in 60 years, and that could keep it mild compared to recessions in the past. With that noted, Bannister may have to dodge a bullet or two, as the definition of a recession is two consecutive quarters of negative gross domestic product. First-quarter 2022 GDP decreased at an annual rate of 1.4%, and should that happen in the second quarter, that would technically place the economy in recession now.
Originally posted at 24/7 Wall St.
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