Continuing geopolitical conflict and lingering logistical hurdles have aggravated inflation rates. However, Russia might consider a military withdrawal from some areas of Ukraine soon, which seems to imply movement towards an improvement of the situation. Furthermore, despite the Fed’s hawkish stance, which has driven diminishing growth estimates, the stock market has recovered over the past two weeks.
In addition, according to the U.S. Bureau of Labor Statistics, the number of new hires went up in February to 6.70 million, indicating a steady economic recovery. Industry analysts expect the S&P 500 to see a 16.8% surge over the next 12 months.
Given this backdrop, we think fundamentally strong stocks QUALCOMM Incorporated (QCOM), Cigna Corporation (CI), and Archer-Daniels-Midland Company (ADM) could be solid bets for the long term.
QUALCOMM Incorporated (QCOM)
QCOM in San Diego, Calif., develops and commercializes foundational technologies for the wireless industry worldwide. It has three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI).
On Feb. 2, 2022, Cristiano Amon, QCOM’s President, and CEO, said, “We are at the beginning of one of the largest opportunities in our history, with our addressable market expanding by more than seven times to approximately $700 billion in the next decade. Our one technology roadmap positions us as the partner of choice for both mobile and the connected, intelligent edge.”
QCOM’s non-GAAP revenues came in at $10.70 billion, up 30% year-over-year for its fiscal year 2022 first quarter, ended Dec. 26, 2021. Its non-GAAP net income was $3.69 billion, up 46.9% year-over-year, while its non-GAAP EPS came in at $3.23, up 48.8% year-over-year. Also, its non-GAAP EBT was $4.31 billion, up 47.9% year-over-year.
Analysts expect QCOM’s revenue to increase 26.5% in its fiscal 2022, to $42.35 billion. Its EPS is also expected to increase 38.6% to $11.84 in its fiscal year 2022. The stock surpassed its EPS estimates in each of the trailing four quarters. Over the past year, it has gained 15.3% in price to close yesterday’s trading session at $152.82.
QCOM’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
Also, the stock has a B grade for Growth, Value, and Quality. Within the A-rated Semiconductor & Wireless Chip industry, it is ranked #4 out of 96 stocks. Click here to see the additional POWR Ratings for Momentum, Sentiment, and Stability for QCOM.
Click here to checkout our Semiconductor Industry Report for 2022
Cigna Corporation (CI)
CI provides insurance and related products and services in the United States. Its segments are Evernorth and Cigna Healthcare. The Bloomfield, Conn.-company distributes its products and services through insurance brokers and consultants.
On Feb. 3, 2022, David M. Cordani, chairman and CEO, said, “2022 will be a year of growth across our franchise as we continue innovating and advancing our work to make healthcare more affordable, predictable, and simple.”
CI’s adjusted revenues were $45.68 billion, up 9.6% year-over-year for the fourth quarter, ended Dec. 31, 2021. Its pharmacy revenues came in at $32.33 billion, up 14.2% year-over-year. And the company’s adjusted income from operations came in at $1.57 billion, up 24.1% year-over-year, while its adjusted EPS increased 35.9% year-over-year to $4.77.
Analysts expect CI’s revenue to grow 5% to $188.10 billion in its fiscal year 2023. Its EPS is estimated to rise 11.5% to $25.07 in 2023. Also, it surpassed EPS estimates in each of the trailing four quarters. And over the past six months, the stock has gained 19.7% in price to close yesterday’s session at $239.61.
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.
CI has a B grade for Growth, Value, Stability, and Sentiment. Within the B-rated Medical - Health Insurance industry, it is ranked #5 of 11 stocks. Click here to see the additional POWR Ratings for CI’s Momentum and Quality.
Click here to checkout our Healthcare Sector Report for 2022
Archer-Daniels-Midland Company (ADM)
ADM procures, transports, stores, processes, and merchandises agricultural commodities, products, and ingredients in the U.S., Switzerland, Cayman Islands, Brazil, Mexico, the U.K., and internationally. The Chicago-based company has three segments: Ag Services and Oilseeds; Carbohydrate Solutions; and Nutrition.
On Jan. 25, 2022, Chairman and CEO Juan Luciano said, “As we enter 2022, we’re well situated to capitalize on strong crush margins, driven by good demand for meal and for vegetable oil as a feedstock for renewable green diesel; a continuing healthy ethanol market, supported by increased domestic and export demand and better clarity of the regulatory landscape; and our robust Nutrition sales pipeline, as well as the accretion of our recent acquisitions in that business.”
ADM’s adjusted segment operating profit came in at $1.41 billion, up 22.7% year-over-year. Its revenues were $23.09 billion, up 28.4% year-over-year. In addition, its adjusted net earnings came in at $850 million, up 24.3% year-over-year, while its adjusted EPS came in at $1.50, up 24% year-over-year.
ADM’s revenue is expected to increase 4% in its fiscal year 2022 to $88.67 billion. Its EPS is expected to grow 2.9% per annum for the next five years. It surpassed the EPS estimates in each of the trailing four quarters. And over the past year, the stock has gained 58.4% in price to close yesterday’s trading session at $90.26.
ADM has an overall A rating, which equates to Strong Buy in our proprietary rating system. The stock also has an A grade for Growth and a B grade for Value and Sentiment.
ADM is ranked #3 of 30 stocks in the Agriculture industry. Click here to check additional ADM ratings for Momentum, Stability, and Quality.
QCOM shares were trading at $151.99 per share on Friday morning, down $0.83 (-0.54%). Year-to-date, QCOM has declined -16.50%, versus a -4.27% 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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