3 Reliable Stocks to Fall Back on When Times Are Tough

The stock market volatility is rife amid the persistently high inflation and the Fed’s tightening monetary policy despite a slowing economy. Given such challenging times, we think it could be wise to fall back on quality stocks Cigna (CI), Agilent (A), and Flowers Foods (FLO) for safeguarding one’s portfolio. Keep reading….

The stock market has been witnessing significant volatility amid record high inflation, the Fed’s rate hikes, and geopolitical issues. This is evident from the CBOE Volatility Index’s 46.9% year-to-date gains. Moreover, the Fed might launch either 50 or another 75 basis points rate hike this month.

Quincy Krosby, the chief global strategist at LPL Financial, said, “Federal Reserve speakers are stressing that the central bank will not pivot away from tightening anytime soon.”

On the other hand, benchmark indices plunged more than 4% in August 2022. Moreover, according to a survey by the Federal Reserve Bank of Philadelphia, real GDP will grow at a 1.4% annual rate in the third quarter, down 44% from the prior prediction of 2.5%.

Given the uncertain market backdrop, it could be wise for investors to fall back on fundamentally solid stocks Cigna Corporation (CI), Agilent Technologies, Inc. (A), and Flowers Foods, Inc. (FLO) now.

Cigna Corporation (CI)

CI provides insurance and related products and services in the United States. Its segments are Evernorth; and Cigna Healthcare. The company distributes its products and services through insurance brokers and consultants.

On August 29, 2022, CI declared that it will expand the reach of its ACA Marketplace exchange plans, by which more customers and communities will be able to access affordable, predictable, and simple health care coverage in 2023. This should boost CI’s revenues in the long run.

For its second quarter ended June 30, 2022, CI’s total revenues increased 5.4% year-over-year to $45.48 billion. Its adjusted income from operations came in at $1.98 billion, up 9.6% year-over-year. Also, its adjusted EPS came in at $6.22, up 18.7% year-over-year.

Analysts expect CI’s revenue to increase 3.3% year-over-year to $179.85 billion in 2022. Its EPS is estimated to increase 12.3% year-over-year to $22.99 in 2022. It surpassed EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 33.9% to close the last trading session at $288.04.

CI’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

CI has a B grade for Growth, Value, Sentiment, and Quality. Within the A-rated Medical – Health Insurance industry, it is ranked #5 out of 11 stocks. Click here for the additional POWR Ratings for Momentum and Stability for CI.

Agilent Technologies, Inc. (A)

A provides application-focused solutions to the life sciences, diagnostics, and applied chemical markets worldwide. Its segments are Life Sciences and Applied Markets; Diagnostics and Genomics; and Agilent CrossLab.

On September 1, 2022, A announced its collaboration with METTLER TOLEDO to evade error-prone sample preparation. Their co-developed solution provides a fully automated and digitalized LC or GC workflow that aims to eliminate common errors in the weighing process, thereby minimizing operational costs.

On August 2, 2022, A acquired Polymer Standards Service GmbH, a solution provider in the field of polymer characterization. Jacob Thaysen, President of A’s Life Sciences and Applied Markets Group, said, “We’re extremely pleased to have the PSS team join Agilent to help us expand our leadership in liquid chromatography and the GPC/SEC market.”

A’s total net revenue came in at $1.72 billion for its third quarter ended July 31, 2022, up 8.3% year-over-year. Its non-GAAP net income came in at $401 million, up 19% year-over-year, while its non-GAAP EPS came in at $1.34, up 21.8% year-over-year.

For 2022, A’s revenue is expected to increase 21% year-over-year to $6.74 billion. Its EPS is estimated to increase 32.1% year-over-year to $5.06 in 2022. Moreover, it surpassed EPS estimates in each of the four trailing quarters. A’s shares have gained marginally intraday to close the last trading session at $128.93.

A’s overall A rating equates to a Strong Buy in our proprietary rating system. It has an A grade for Sentiment and a B grade for Value, Stability, and Quality.

Within the Medical – Diagnostics/Research industry, it is ranked first among 54 stocks. Click here for the additional POWR Ratings for Growth and Momentum for A.

Flowers Foods, Inc. (FLO)

FLO produces and markets packaged bakery products in the United States. It offers fresh breads, buns, rolls, snack cakes, tortillas, frozen bread, and rolls. The company operates 46 bakeries comprising 44 owned and two leased.

FLO’s branded retail sales for the second quarter ended July 16, 2022, came in at $735.90 million, up 9.1% year-over-year. Its store-branded retail sales came in at $157.22 million, up 20% year-over-year. In addition, its total sales came in at $1.13 billion, up 11% year-over-year.

Street expects FLO’s revenue to increase 10.8% year-over-year to $4.80 billion in 2022. Its EPS is expected to increase 3.2% year-over-year to $1.28 in 2022. It surpassed EPS estimates in three of the trailing four quarters. Over the past year, the stock has gained 12.7% to close the last trading session at $27.28.

It’s no surprise that FLO has an overall A rating, equating to a Strong Buy in our proprietary rating system. In addition, it has an A grade for Growth and a B grade for Quality.

FLO is ranked #6 out of 86 stocks in the B-rated Food Makers industry. Click here for the additional POWR Ratings for FLO (Value, Momentum, Stability, and Sentiment).

CI shares rose $2.93 (+1.02%) in premarket trading Friday. Year-to-date, CI has gained 27.87%, versus a -15.39% rise in the benchmark S&P 500 index during the same period.

About the Author: Riddhima Chakraborty

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through her insightful commentaries.

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