The market has been below stress amid excessive inflation, rising rates of interest, and a slowing financial system. Amid lingering macro headwinds, dividend investing may assist traders guarantee a gentle revenue stream. Therefore, high quality dividend shares, CVS Health (CVS) and Spok Holdings (SPOK) may very well be best investments to navigate by robust occasions and past. Keep studying….
Amid excessive costs, consecutive charge hikes, and rising recession odds, market volatility has heightened this yr. The CBOE Volatility Index is up 40.5% year-to-date.
Aneta Markowska, a chief monetary economist at Jefferies Financial Group Inc., expects an financial downturn to start by the third quarter of 2023. She stated, “It may begin out feeling like a light recession, but then intensify as we move through time.”
Given the present backdrop, dividend shares have been gaining traction as they’ll present traders with regular long-term returns regardless of financial uncertainty. Investors’ curiosity in dividend shares is clear from the SPDR S&P Global Dividend ETF’s (WDIV) 6.7% positive factors over the previous month.
Moreover, in line with Morgan Stanley’s Nick Lentini, “The investing backdrop of the previous yr, pushed by macro-economic circumstances and mixed with the rising danger of recession, have fueled outperformance for many dividend-paying stocks.”
CVS Health Corporation (CVS)
CVS supplies well being companies within the United States. Its segments are Health Care Benefits; Pharmacy Services; and Retail/LTC.
On November 2, 2022, Karen S. Lynch, CVS’ President, and CEO, stated, “We proceed to execute on our technique with a deal with increasing capabilities in well being care supply, and the introduced acquisition of Signify Health will additional strengthen our engagement with shoppers.”
CVS has paid dividends for 14 consecutive years. Over the final three years, CVS’ dividend payouts have grown at a 3.2% CAGR. While CVS’ four-year common dividend yield is 2.79%, its present dividend interprets to a 2.25% yield.
For its third quarter that ended September 30, 2022, CVS’ complete revenues got here in at $81.16 billion, up 10% year-over-year. Its adjusted working revenue got here in at $4.23 billion, up 3.9% year-over-year. Also, its adjusted EPS got here in at $2.09, up 6.1% year-over-year.
Analysts anticipate CVS’ income to extend 7.8% year-over-year to $314.84 billion in 2022. Its EPS is anticipated to extend by 5.6% each year for the following 5 years. It surpassed EPS estimates in all 4 trailing quarters. Over the previous month, the inventory has gained 7.6% to shut the final buying and selling session at $96.10.
CVS’ robust fundamentals are mirrored in its POWR Ratings. The inventory has an general A score, which signifies a Strong Buy in our proprietary score system. The POWR Ratings assess shares by 118 various factors, every with its personal weighting.
CVS has an A grade for Growth and a B for Stability and Sentiment. Within the B-rated Medical – Drug Stores business, it’s ranked first amongst 4 shares. Click here for the extra POWR Rating for Value, Momentum, and Quality for CVS.
Spok Holdings, Inc. (SPOK)
SPOK supplies healthcare communication options within the United States, Europe, Canada, Australia, Asia, and the Middle East. It delivers medical data to care groups.
On October 26, 2022, Vincent D. Kelly, SPOK’s CEO, stated, “Going ahead, we imagine our intensive expertise working our established communication options will create important worth for stockholders by maximizing income and money circulation technology.”
SPOK has paid dividends for 13 consecutive years. Over the final three years, SPOK’s dividend payouts have grown at a 35.7% CAGR. While SPOK’s four-year common dividend yield is 5.90%, its present dividend interprets to a 15.24% yield.
SPOK’s complete income got here in at $33.74 million for the third quarter that ended September 30, 2022, down 5.9% year-over-year. However, its working revenue got here in at $3.54 million, in comparison with a lack of $3.56 million within the year-ago interval. Moreover, its internet revenue got here in at $2.92 million, in comparison with a lack of $2.49 million within the earlier interval.
Street expects SPOK’s income and EPS to come back in at $32.50 million and $0.07, respectively, for the quarter ending December 2022. Over the previous six months, the inventory has gained 14.7% to shut the final buying and selling session at $8.20.
SPOK’s general A score equates to a Strong Buy in our proprietary score system. It has an A grade for Growth and a B for Sentiment and Quality.
CVS shares have been buying and selling at $95.47 per share on Thursday morning, down $0.63 (-0.66%). Year-to-date, CVS has declined -5.37%, versus a -16.64% rise within the benchmark S&P 500 index throughout the identical interval.
About the Author: Riddhima Chakraborty
Riddhima is a monetary journalist with a ardour for analyzing monetary devices. With a master’s degree in economics, she helps traders make knowledgeable funding choices by her insightful commentaries.
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