5 Income Stocks to Turn to When Times Are Tough

The equity market rose on Monday as investors await retail earnings this week. The Dow Jones Industrial Average gained 0.5%, the S&P 500 rose 0.4%, and the Nasdaq Composite edged 0.6% higher. The S&P 500 is coming off its fourth straight one-week gain, marking its longest winning streak since 2021.

On the other hand, although the latest inflation data shows signs of easing price increases, inflation is still running near a 40-year high. According to Chicago Fed President Charles Evans, the Federal Reserve could raise policy rates to 3.25%-3.5% this year and to 3.75%-4% by the end of next year as it tries to tame the raging inflation.

Moreover, with the rising geopolitical issues, it might be wise to invest in income stocks that conventionally pay regular dividends. We think, quality dividend-paying stocks AbbVie Inc. (ABBV), Amgen Inc. (AMGN), Pfizer Inc. (PFE), Bristol-Myers Squibb Company (BMY), and Sisecam Resources LP (SIRE) might be solid buys now.

AbbVie Inc. (ABBV)

ABBV engages in the discovery, development, manufacture, and sale of pharmaceuticals worldwide. The company’s offerings include pharmaceutical products such as autoimmune and intestinal disease therapy HUMIRA, adult plaque psoriasis treatment SKYRIZI, and adult rheumatoid arthritis treatment RINVOQ.

On August 2, ABBV and Sosei Group Corporation announced that they had entered into a new drug discovery collaboration and option-to-license agreement to discover, develop and commercialize small molecules that modulate novel G protein-coupled receptor (GPCR) targets associated with neurological disease. The commercial development of the drug might benefit the company.

On July 20, ABBV and iSTAR Medical SA announced a strategic transaction to further develop and commercialize iSTAR Medical’s MINIject device, a minimally invasive glaucoma surgical (MIGS) device for patients with glaucoma. This is expected to be a step forward in the glaucoma innovation field.

On June 23, ABBV declared a quarterly dividend of $1.41 per share, which was payable to shareholders on August 15. This cumulates to an annual dividend of $5.64 and yields 3.96% on prevailing prices. ABBV’s dividend payouts increased at a 9.9% CAGR over the past three years and a 17.5% CAGR over the past five years. The company has had eight years of consecutive dividend growth.

For the fiscal second quarter ended June 30, ABBV’s net revenues increased 4.5% year-over-year to $14.58 billion. Adjusted earnings after tax rose 10.7% from the prior-year quarter to $6.01 billion. Adjusted EPS improved 11.2% from the same period the prior year to $3.37.

The consensus EPS estimate of $3.75 for the quarter ending December 2022 indicates a 21.8% year-over-year increase. Likewise, the consensus revenue estimate for the same quarter of $15.87 billion reflects an improvement of 6.6% from the prior-year quarter.

Over the past year, the stock has gained 22.2% to close its last trading session at $142.29. It has gained 5.1% year-to-date.

ABBV’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

ABBV has a Quality grade of A and a Growth and Value grade of B. In the 171-stock Medical – Pharmaceuticals industry, it is ranked #8.

Click here to see the additional POWR Ratings for ABBV (Momentum, Stability, and Sentiment).

Amgen Inc. (AMGN)

AMGN engages in the discovery, manufacture, and delivery of human therapeutics globally. The company is focused on the fields of inflammation, oncology, cardiovascular diseases, nephrology, and neuroscience.

On August 4, AMGN and biopharmaceutical company ChemoCentryx, Inc. (CCXI) announced that they had entered into a definitive agreement for AMGN to acquire CCXI for $52 per share in cash. This is expected to bolster the company’s operative capability.

On June 6, AMGN announced the approval of RIABNI (rituximab-arrx) by the U.S. Food and Drug Administration (FDA) for the treatment of adults with moderate to severe rheumatoid arthritis (RA) and who have had an inadequate response to one or more tumor necrosis factor (TNF) antagonist therapies. This approval might prove to be beneficial for the company.

On August 3, AMGN declared a $1.94 per share dividend for the third quarter of 2022, payable on September 8. This cumulates to an annual dividend of $7.76 and yields 3.12% on the current share price. AMGN’s dividend payouts have increased at a CAGR of 10.1% over the past three years and 11.5% over the past five years. The company has had ten years of consecutive years of dividend growth.

For the fiscal second quarter ended June 30, AMGN’s total revenues increased 1% year-over-year to $6.59 billion. Non-GAAP net income and non-GAAP EPS came in at $2.50 billion and $4.65, up 145.3% and 162.7% from the prior-year period.

Street EPS estimate for the fiscal year 2022 of $17.44 reflects a rise of 2% year-over-year. Likewise, Street revenue estimate for the same year of $26.19 billion indicates an increase of 0.8% from the prior year. Additionally, AMGN has an impressive surprise earnings history, as it has topped consensus EPS estimates in each of the trailing four quarters,

The stock has gained 9.3% over the past year and 11.6% year-to-date to close its last trading session at $251.08.

It’s no surprise that AMGN has an overall B rating, which translates to Buy in our POWR Ratings system.

AMGN has an A grade for Quality and a B grade for Value. It is ranked #11 out of the 402 stocks in the Biotech industry.

Click here to see the additional POWR Ratings for Growth, Momentum, Stability, and Sentiment for AMGN.

Pfizer Inc. (PFE)

PFE is a well-known developer and distributor of biopharmaceutical products like medicines, vaccines, and other therapies. The company developed the Pfizer-BioNTech COVID-19 vaccine with BioNTech SE (BNTX).

On August 8, PFE and Global Blood Therapeutics, Inc. (GBT) announced that they had entered into a definitive agreement for PFE to acquire GBT for $68.50 per share in cash. The acquisition is expected to complement the PFE rare hematology field.

On June 29, PFE and BNTX announced their new agreement with the U.S. government to provide 105 million doses of the COVID-19 vaccine, which might include adult Omicron-adapted COVID-19 vaccines.

The government is expected to pay $3.20 billion upon receipt of the doses and has the option to purchase up to 195 million additional doses. The doses are expected to be delivered in late summer and continue into the fourth quarter.

On June 23, PFE declared a $0.40 third-quarter dividend on its common stock, payable to shareholders on September 6. Its annual dividend of $1.60 yields 3.22% on the current share price. The company’s dividend payouts have increased at CAGRs 5.7% over the past three years and 5.9% over the past five years.

PFE’s revenues increased 46.8% year-over-year to $27.74 billion in the fiscal second quarter of 2022. Adjusted income and adjusted EPS improved 93.5% and 92.5% from the prior-year period to $11.66 billion and $2.04.

Analysts expect PFE’s EPS for the quarter ending December 2022 to increase 26.9% year-over-year to $1.37. Likewise, Street expects revenue for the same quarter to improve 4% from the prior-year period to $24.78 billion. Moreover, PFE has topped consensus EPS estimates in each of the trailing four quarters, which is impressive.

The stock has gained 2.6% over the past year to close its last trading session at $49.75.

This promising prospect is reflected in PFE’s POWR Ratings. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system.

PFE has a Value grade of A and a Quality grade of B. It is ranked #10 in the Medical – Pharmaceuticals industry.

To see the additional POWR Ratings for Growth, Momentum, Stability, and Sentiment for PFE, click here.

Bristol-Myers Squibb Company (BMY)

BMY is a developer, licenser, manufacturer, and marketer of biopharmaceutical products worldwide. The company’s offerings include Revlimid, an oral immunomodulatory drug for treating multiple myeloma.

On June 3, BMY announced a definitive merger agreement to acquire Turning Point Therapeutics, Inc. (TPTX) for $76.00 per share. The acquisition is anticipated to close in the third quarter of 2022 and is expected to expand the company’s oncology franchise by adding a late-stage precision oncology asset.

On June 24, BMY announced the FDA’s approval of Breyanzi (lisocabtagene maraleucel), a CD19-directed chimeric antigen receptor (CAR) T cell therapy. Ester Banque, senior vice president & general manager, U.S. Hematology, BMY, said, “Based on the demonstrated clinical benefit, this approval of Breyanzi underscores the significant advances we are making to deliver on the promise of cell therapy.”

On June 15, the company declared a quarterly dividend of $0.54 per share on its $.10 par value common stock, which was payable to shareholders on August 1. Its annual dividend of $2.16 yields 2.90% on prevailing share prices. The company’s dividend payouts have increased at CAGRs 9% over the past three years and 6.4% over the past five years.

For the fiscal second quarter ended June 30, BMY’s total revenues increased 1.6% year-over-year to $11.89 billion. Non-GAAP net earnings attributable to BMY rose 13.2% from the prior-year quarter to $4.15 billion, while non-GAAP EPS improved 18.4% from the same period the prior year to $1.93.

Analysts expect BMY’s EPS to increase 6.9% year-over-year to $8.03 in the fiscal year 2023. Likewise, Street expects revenue for the same year to rise 3.8% from the prior year to $47.85 billion. In addition, BMY has topped consensus EPS estimates in each of the trailing four quarters.

The stock has gained 10.4% over the past year and 19.5% year-to-date to close its last trading session at $74.53.

BMY has an overall rating of A, which translates to Strong Buy in our POWR Ratings system.

BMY has a Value grade of A and a Growth, Sentiment, and Quality grade of B. It is ranked #5 in the Medical – Pharmaceuticals industry.

To see the additional POWR Ratings for Momentum and Stability for BMY, click here.

Sisecam Resources LP (SIRE)

SIRE engages in the mining of trona-ore and soda ash production business globally. The company processes trona ore into soda ash, which is a raw material used in flat glass, container glass, chemicals, paper, and other consumer and industrial products. 

On July 6, Sisecam Chemicals Resources LLC delivered a non-binding proposal to the Board of Directors of Sisecam Resource Partners LLC, the General Partner of SIRE, to acquire the outstanding common units, representing limited partner interests in the Issuer not already owned by SCR or its affiliates.

On July 30, SIRE declared a quarterly distribution of $0.50 for the second quarter of 2022, payable on August 23. Its annual dividend of $2.00 yields 8.97% on prevailing prices.

SIRE’s net sales increased 56.7% year-over-year to $189.10 million for the fiscal second quarter ended June 30. Net income attributable to SIRE and net income per limited partner unit stood at $15.40 million and $0.76, up 431% and 406.7% from the same period the prior year.

The consensus revenue estimate for the fiscal year ending December 2022 of $2.44 billion indicates a 352.3% year-over-year improvement.

SIRE’s shares have gained 69.7% over the past year and 32.2% year-to-date to close its last trading session at $21.81.

SIRE has an overall A rating, equating to a Strong Buy in our proprietary rating system.

SIRE has an A grade for Growth and a B grade for Value, Stability, Sentiment, and Quality. In the 89-stock Chemicals industry, it is ranked #1. The industry is rated A.

In addition to the POWR Rating grades we’ve stated above, one can see SIRE’s rating for Momentum here.

ABBV shares were trading at $143.20 per share on Tuesday afternoon, up $0.91 (+0.64%). Year-to-date, ABBV has gained 8.77%, versus a -8.76% rise in the benchmark S&P 500 index during the same period.

Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.

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