Top blue-chip stocks to watch in August: CVX, UNH, MRK, AAPL & PG

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Highlights:

  • Chevron Corporation (NYSE: CVX) rose over 26 per cent YTD.
  • UnitedHealth Group Incorporated's (NYSE: UNH) latest quarter revenue jumped 13 per cent YoY.
  • AAPL stock grew nearly three per cent in 12 months.

The blue-chip companies are comprised of the stocks of popular companies that are industry leaders. The company tends to have a solid performance track record, making it a favourite to some investors.

Although the companies also provide strong returns, they could be affected by the uncertainties in the broader market. For instance, most big companies came under pressure this year amid rising inflation and the looming fear of a recession.

The US Federal Reserve is increasing the interest rates to bring down inflation, which has slowed economic growth while raising fears of a possible recession.

Several investors are exploring opportunities in the blue-chip stocks, given their robust business model. In addition, the blue-chip stocks can also be considered dividend aristocrats, making them attractive to some investors.

Let's look at some blue-chip stocks that may be in the limelight amid market turbulence.

Chevron Corporation (NYSE: CVX)

The oil and natural gas company Chevron Corporation (NYSE: CVX) returned 26.09 per cent year-to-date (YTD), suggesting how it has maintained steady momentum in recent months. On a year-over-year (YoY) basis, it gained 49.78 per cent.

At the time of writing, CVX was trading around 18 per cent lower from its 52-week high of US$ 182.40 (June 8, 2022) and about 59 per cent higher from its 52-week low of US$92.86 (August 19, 2021).

The CVX stock has a Relative Strength Index (RSI) of 50.29 as of July 25. Notably, the RSI swings between zero and 100. While zero to 30 means oversold and 70 to 100 means overbought, 50 to 70 comes under the neutral category.

The US$ 290.59 billion market cap firm reported revenue of US$ 54.37 billion in Q1 FY22, while its net income was US$ 6.27 billion, or US$ 3.22 per diluted share.

Its current yield and annualized dividends are 3.94 per cent and US$ 5.68, respectively. The current yield is the annual income one gets from an investment (dividend or interest) relative to the security price.

In the first quarter of 2021, its revenue and net income were US$ 32.02 billion and US$ 1.39 billion, respectively. Its diluted EPS was US$ 0.72.

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UnitedHealth Group Incorporated (NYSE: UNH)

One of the leading players in the health care field, UnitedHealth Group Incorporated (NYSE: UNH), reported its Q2 FY22 earnings results on July 15, following which its stock price rose significantly.

UNH stock rose 6.82 per cent in one month. On a YTD basis, it returned 5.44 per cent gains while increasing 26.75 per cent over the past 12 months.

The US$ 496.61 billion market cap company posted revenue of US$ 80.3 billion in the latest quarter, up 13 per cent YoY, while its earnings from the operation were US$ 7.1 billion. In Q1 FY21, its earnings from operations were US$ 6 billion.

At its current price, it traded lower by around 4 per cent from its 52-week high of US$ 553.29 (April 14, 2022) and over about 38 per cent from its 52-week low of US$ 383.12 (October 1, 2021).

UNH's current yield is 1.27 per cent. Its annualized dividend is US$ 6.60.

Merck & Company, Inc. (NYSE: MRK)

The leading pharmaceutical company, Merck & Company, Inc. (NYSE: MRK), has a current yield of 3.06 per cent, and its annualized dividend is US$ 2.76. The US$ 228.85 billion market cap company returned 18.12 per cent gains YTD while soaring 16.75 per cent in a year.

The Kenilworth, New Jersey-based company's sales were US$ 15.90 billion in Q1 FY22, up 50 per cent YoY. Its net income was US$ 4.31 billion, or US$ 1.70 per share, significantly up from US$ 2.74 billion, or US$ 1.08 per share in Q1 FY21.

Its RSI is 46.25. MRK's five-day average share volume is 8,656,646, and its 30-day average volume is 11,430,234.

Apple Inc. (NASDAQ: AAPL)

Apple Inc. (NASDAQ: AAPL), has a current yield of 0.6 per cent, while its annualized dividend stayed at US$ 0.92.

The US$ 2.65 trillion market cap firm currently traded below around 16 per cent from its 52-week high of US$ 182.94 (January 4, 2022) and about 18 per cent high from its lowest price of US$ 129.04 (June 16, 2022) in the same period.

The iPhone maker returned gains of 2.95 per cent in one year while slipping 13.86 per cent YTD. Notably, most mega-cap stocks came under pressure this year as investors traded cautiously amid market uncertainties.

Its second-quarter revenue rose 9 per cent YoY to US$ 97.27 billion in fiscal 2022, and its net income was US$ 25.10 billion, or US$ 1.52 per diluted share. In contrast, its net income and diluted EPS were US$ 23.63 billion and US$ 1.40 in Q2 FY21.

Procter & Gamble Company (NYSE: PG)

The consumer goods company Procter & Gamble Company (NYSE: PG) has a current yield of 2.55 per cent. Its annualized dividend is US$ 3.653.

Even though the PG stock traded in the red this year, slipping about 12 per cent YTD, it rose 3.01 per cent annually. Procter & Gamble's RSI is 50.73.

Its current trading price was about 13 per cent lower than its 52-week high of US$ 165.35 (January 21, 2022) and about 11 per cent up from its 52-week low of US$ 129.50 (June 15, 2022).

The Cincinnati, Ohio-based firm declared a quarterly dividend of US$ 0.9133 per share on its common stock (payable on or after August 15) on July 12.

On a Generally Accepted Accounting Principles (GAAP) basis, its net sales were up seven per cent YoY to US$ 19.4 billion in Q3 FY22, while its diluted EPS grew by six per cent to US$ 1.33 on an annual basis.

Bottom line:

The investors are keeping a close watch on the earnings season for cues on how the enterprises have tackled the uncertainties in the market. In addition, the GDP, due to release this week, would also be closely followed.

Although blue chip stocks are more popular among conservative investors, some risk-tolerant investors also explore opportunities in the segment, as the stocks tend to offer stability amid market downturns.

However, the Dow Jones Industrial Average, which is comprised of the top 30 blue chip stocks, slumped 12.22 per cent year-to-date (YTD), while increasing 3.65 per cent this month.


 


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