Kalkine Media lists US stocks to watch as interest rates rise again

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Highlights:

  • M&T Bank Corporation (NYSE: MTB) announced a quarterly cash dividend of US$ 1.20 per share, payable on September 30, 2022.
  • Dollar General Corporation (NYSE: DG) noted 11 per cent YoY growth in its net sales of Q2 FY22.
  • UnitedHealth Group Incorporated (NYSE: UNH) revenue rose 13 per cent YoY in Q2 FY22.

M&T Bank Corporation (NYSE: MTB), Dollar General Corporation (NYSE: DG), and UnitedHealth Group Incorporated (NYSE: UNH) are the companies that have so far managed to stay in the green.

The soaring prices have hurt the sentiments of market participants and policymakers in recent times.

The Federal Reserve raised the policy rates to their highest level in about 15 years on Wednesday, September 21, to tame inflation. The central bank announced another three-quarter of a percentage point hike for the third time in September, lifting its projection range to be between three per cent and 3.25 per cent.

Let's take a look at these stocks amid the sloppy investment environment and see how they have performed so far amid the hovering economic woes:

M&T Bank Corporation (NYSE: MTB)

M&T Bank is one of the major banks with a dividend yield of 2.56 per cent. The US$ 32.6 billion company provides banking, loans, and other investment-related services to its clients.

The MTB stock jumped around 20 per cent YTD while gaining around 39 per cent YoY. In the running quarter, it shot up about 16 per cent. The stock of the bank holding firm touched its 52-week high of US$ 193.42 on August 16, 2022.

Meanwhile, on September 21, the New York-based bank said it had raised its prime lending rate from 5.5 per cent to 6.25 per cent, effective September 22.

The company's board decided to pay a quarterly cash dividend of US$ 1.2 on its common stock, payable on September 30 this year.

M&T Bank's total income jumped 11 per cent YoY to US$ 571.1 million in Q2 FY22, while its net income dropped by 53 per cent YoY to US$ 217.52 million in the quarter.

Dollar General Corporation (NYSE: DG)

Dollar General is a variety store operator with a dividend yield of 0.9 per cent. The US$ 54.2 billion market cap firm operates a chain of discount stores.

The stock of the variety store chain operator added around one per cent YTD while increasing about nine per cent YoY.

Dollar General Corporation's revenue soared nine per cent YoY to US$ 9.4 billion in the fiscal 2022 second quarter. The Goodlettsville, Tennessee-based company's net income soared 6.4 per cent YoY to US$ 678 million in Q2 FY22.

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UnitedHealth Group Incorporated (NYSE: UNH)

UnitedHealth Group is a leading managed healthcare and insurance firm with a dividend yield of 1.26 per cent. The stock of the US$ 478.99 billion market cap firm added about one per cent YTD while jumping 24 per cent YoY.

In Q2 FY22, UnitedHealth Group's revenue soared 13 per cent YoY to US$ 80.3 billion. Its net earnings increased to US$ 5.19 billion in Q2 FY22, from US$ 4.37 billion in the year-ago period.

Bottom line

Although there is no guarantee, financial stocks, especially banks and insurance providers, tend to perform well even at a higher rate scenario. In addition, due to the higher costs and interest rates, the consumers tend to shift their spending into the discount stores to make some savings, which generally benefits the discount store operators.

But, given the highly volatile broader market and the Fed's indications of further aggressive hikes in the coming months, it is hard to predict the future state of the market.

Hence, traders should exercise due diligence before making any decisions due to persisting macroeconomic headwinds. 


 


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