Tired of Volatility? 3 Stocks That Can Stabilize Your Portfolio in Q4

Various macroeconomic and geopolitical headwinds have led to wild swings in the market this year. The S&P 500 has seen a nearly 16% decline year-to-date, and the Nasdaq Composite has declined almost 28% over this period.

The Federal Reserve has raised interest rates six times this year to tame the high inflation. While the October inflation data indicates signs of cooling down, Fed is expected to increase rates until inflation remains above its target of 2%.

Fed staff economists warned that the chances of a recession in the next year had increased to almost 50% on slowing consumer spending, global economic risks, and more interest rate hikes.

Furthermore, Venture Capitalist Doug Leone gave a gloomy outlook for the global economy, warning that today’s economic downturn was “more difficult and more challenging” than recessions in 2000 and 2008. Leone doesn’t expect the economy to recover until at least 2024.

Given the backdrop, it could be wise to invest in fundamentally sound stocks, Oracle Corporation (ORCL), CNA Financial Corporation (CNA), and Weis Markets, Inc. (WMK), which have the potential to give your portfolio some stability.

Oracle Corporation (ORCL)

ORCL offers products and services that address enterprise technology environments. The company provides Oracle cloud software which includes cloud software applications, including Oracle Fusion cloud enterprise resource planning (ERP), Oracle Fusion cloud enterprise performance management, Oracle Advertising, and NetSuite applications suite.

On November 3, ORCL announced the launch of Oracle Public Safety Services, a new technology platform for law enforcement and first responders. The platform has a unified hardware and software suite and is a significant addition to the company’s offerings.

In October, ORCL and NVIDIA Corporation (NVDA) announced a multi-year partnership to speed up enterprise AI adoption. The collaboration will bring the full NVIDIA accelerated computing stack from GPUs to systems to software to Oracle Cloud Infrastructure (OCI).

“Our expanded alliance with NVIDIA will deliver the best of both companies expertise to help customers across industries – from healthcare and manufacturing to telecommunications and financial services – overcome the multitude of challenges they face,” said Safra Catz, ORCL’s CEO.

ORCL’s total revenues increased 17.7% year-over-year to $11.45 billion for the fiscal 2023 first quarter that ended August 31, 2022. Its cloud services and license support revenue came in at $8.42 billion, up 14.2% year-over-year. Also, its services revenue grew 74.3% from the year-ago value to $1.36 billion.

Furthermore, cash inflows from operating and financing activities came in at $6.39 billion and $12.31 billion, up 18.6% and 207.3% year-over-year.

ORCL’s annual dividend of $1.28 per share yields 1.56% on the current price. Its dividend payments have grown at a CAGR of 12% over the past three years and 12.2% over the past five years. Moreover, the company has increased dividends for eight consecutive years.

Analysts expect ORCL’s revenue and EPS of $49.29 billion and $4.96 for the current fiscal year (ending May 2023), indicating a rise of 16.1% and 1.3% year-over-year, respectively. Furthermore, the company’s revenue and EPS for fiscal 2024 are expected to grow 7.3% and 13.9% year-over-year to $52.89 billion and $5.65, respectively.

Furthermore, ORCL has surpassed the consensus revenue estimates in each of the trailing four quarters. The stock has gained 12.7% over the past month and 17.9% over the past six months to close the last trading session at $82.56.

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

ORCL has a B grade for Sentiment and Stability. In the Software – Application industry, it is ranked #21 out of 139 stocks. 

Click here for the additional POWR Ratings for Value, Momentum, Growth, and Quality for ORCL.

CNA Financial Corporation (CNA)

CNA offers commercial property and casualty insurance products primarily in the United States. The company operates through five segments: Specialty; Commercial; International; Life & Group; and Corporate & Other.

The company markets its products through independent agents, brokers, and general underwriters to small, medium, and large businesses; insurance companies; and other groups in oil and gas, financial services, healthcare, and technology industries.

In the fiscal 2022 third quarter ended September 30, 2022, CNA's net written premiums from Property & Casualty Operations increased 7.9% year-over-year to $2.06 billion. Its net written premiums from Specialty and Commercial segments came in at $840 million and $962 million, up 2.2% and 15.8% year-over-year, respectively.

In addition, the company’s core income from Property & Casualty Operations grew 19.8% from the prior-year period to $260 million.

The company has raised its dividend for six consecutive years. It pays an annual dividend of $1.60, representing a yield of 3.77% at the current share price. Its dividend payouts have grown at a CAGR of 4.6% over the past three years and 7.8% over the past five years.

Analysts expect CNA’s revenue for fiscal 2023 (ending December 31, 2023) to increase 6.3% year-over-year to $12.75 billion. The company’s EPS for the next fiscal year is expected to grow 16.4% year-over-year to $4.42. Over the past month, shares of CNA have gained 3.7% to close the last trading session at $42.20.

CNA’s POWR Ratings reflect a promising outlook. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.

CNA has a grade of A for Stability and a B for Sentiment and Momentum. In the Insurance - Property & Casualty industry, CNA is ranked #8 out of 52 stocks. 

Click here for the additional POWR Ratings for Quality, Value, and Growth for CNA.

Weis Markets, Inc. (WMK)

WMK is a Mid-Atlantic food retailer that engages in the retail sale of food through a chain of supermarkets. The company operates primarily under the Weis Markets name and Weis, Weis Great Meals Start Here, Weis Gas-n-Go, and Weis Nutri-Facts. It owns and operates more than 197 stores in Pennsylvania, Maryland, Delaware, New Jersey, New York, West Virginia, and Virginia.

On October 31, the company’s Chairman, President, and CEO, Jonathan H. Weis, said, “As customers look for more ways to save, the Weis Gas Rewards Program, Weis Quality private label products, and our Low, Low-Price Programs offer strong value. We will build on our value proposition in the fourth quarter when customers can earn a free turkey or ham for their holiday celebrations based on their purchases.”

On October 27, WMK’s Board of Directors declared a 6.3% increase in the quarterly cash dividend from $0.32 to $0.34 per share, paid on November 21, 2022. The last quarterly cash dividend increase was 3.2% for the fiscal 2021 fourth quarter from $0.31 to $0.32 per share.

The company pays $1.36 annually as a dividend, representing a yield of 1.59% at the current share price. Its 4-year average dividend yield is 2.46%. Its dividend payouts have grown at a 1.6% CAGR over the past three years.

WMK’s net sales increased 8.5% year-over-year to $1.15 billion, while its comparable store sales grew 7.9% year-over-year for the fiscal 2022 third quarter ended September 24, 2022. The company’s net income came in at $28.66 million, compared to $28.51 million in the third quarter of 2021. Also, its earnings per share were $1.07, compared to $1.06 in the previous quarter’s period.

The stock has gained 26.5% year-to-date and 27.6% over the past year to close the last trading session at $84.70.

WMK’s fundamental strength and strong outlook are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

WMK has a grade of A for Stability and Quality. It is ranked #11 of 39 stocks in the A-rated Grocery/Big Box Retailers industry. 

Click here to see additional POWR Ratings (Growth, Sentiment, Value, and Momentum) for WMK.

ORCL shares were unchanged in premarket trading Thursday. Year-to-date, ORCL has declined -3.69%, versus a -14.29% rise in the benchmark S&P 500 index during the same period.

Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.

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