5 taper-proof stocks to keep an eye on after Fed’s stimulus rollback

Highlights

  • The consolidated revenue of United Parcel Service, Inc. (NYSE: UPS) soared 14.5% YoY to US$23.42 billion in Q2, FY21.
  • The sales and operating revenue of LyondellBasell Industries (NYSE: LYB) were US$11.56 billion in Q2, FY21.
  • The net sales of 3M Company (NYSE: MMM) surged 24.7% YoY to US$8.95 billion in Q2, FY21.

The stock markets saw many ups and downs in recent sessions due to various economic uncertainties. Although the labor market has been improving, one of the key goals of the Fed’s monetary policy, investors were anxious to see how the planned stimulus tapering later this year might pan out for the economy. The Fed’s bond-buying policy, a major covid-era measure, has helped encourage growth while ensuring sufficient liquidity in the economy.

However, it will be worth watching how the economy sustains itself without the stimulus. Therefore, investors will eagerly wait for any changes in the Fed interest rates post-stimulus.

However, some analysts were optimistic about the performances of the basic materials and industrial sectors from past tapering experiences. In 2013, when the Fed had reduced its asset-buying programs, these two segments were the top performers.

Here we look at five cash-rich stocks that might stay unaffected by Fed's tapering.


United Parcel Service, Inc. (NYSE: UPS)

United Parcel Service is an Atlanta-based package delivery company and operates globally.

The company's consolidated revenue grew by 14.5 percent YoY to US$23.42 billion in Q2, FY21.

The operating profit was US$3.3 billion, up 47.3 percent from the year-ago quarter. Its net earnings increased by 50.2 percent YoY to US$3.05 per diluted share.

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The stock traded at US$194.175 at 11:51 am ET on Sep 13, up 0.47 percent from its previous close. UPS rose 17.99 percent YTD. It has a market cap of US$169.32 billion, a P/E Ratio of 27.73, and a forward P/E one year of 17.32. Its EPS is US$7.01.

UPS’ 52-week highest and lowest stock prices were US$219.59 and US$154.76, respectively. The trading volume was 3,094,125 on September 10.


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Deere & Company (NYSE: DE)

Deere & Company is a manufacturing company headquartered in Moline, Illinois. It manufactures machinery, diesel engines, etc.

The stock was priced at US$357.53 at 12:05 pm ET on Sep 13, down 1.53 percent from its previous close. The DE stock rose 35.66 percent YTD. Its market cap is US$111.10 billion, the P/E Ratio is 20.76, and the forward P/E one year is 19.21. Its EPS is US$17.26.

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The 52-week highest and lowest stock prices were US$400.34 and US$210.18, respectively. Its share volume on September 10 was 1,235,453.

The company’s net sales and revenue jumped 29 percent YoY to US$11.527 billion in Q3, FY21. Its net income came in at US$1.667 billion, an increase of 106 percent from US$811 million in the year-ago quarter. Deere & Company projects its full-year earnings to be between US$5.7 billion and US$5.9 billion in FY21.

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3M Company (NYSE: MMM)


The 3M company is a major business conglomerate and has interests in various sectors including industrial, healthcare, and consumer products. It is based in Saint Paul, Minnesota.

The stock traded at US$186.67 at 12:13 pm ET on September 13, up 1.15 percent from its last closing price. The stock value ticked up 7.38 percent YTD. It has a market cap of US$108.18 billion, a P/E Ratio of 18.38, and a forward P/E one year of 18.25. Its EPS is US$10.17.

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The 3M’s 52-week highest and lowest stock prices were US$208.95 and US$156.13, respectively. Its share volume was 2,231,496 on September 10.

The company's sales soared 24.7 percent YoY to US$8.95 billion in Q2, FY21. Its operating income was US$1.97 billion compared to US$1.74 billion in the year-ago quarter.

The net income attributable to the company was US$1.52 billion, or US$2.59 per diluted share, compared to US$1.30 billion, or US$2.25 per diluted share in Q2, FY20.

The company raised its full-year earnings forecast to a range of US$9.70 to US$10.10 per share, from its previous projection of US$9.20 to US$9.70 per share.

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LyondellBasell Industries (NYSE: LYB)


LyondellBasell is a chemical company based in Rotterdam, Netherlands. It has interests in polypropylene compounds and chemical refining.

The stock was priced at US$94.25 at 12:26 pm ET on Sep 13, up 1.49 percent from its previous closing price. The LYB stock gained 4.01 percent YTD. Its market cap is US$31.44 billion, the P/E Ratio is 7.71, and the forward P/E one year is 4.69. Its EPS is US$12.19.

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LyondellBasell’s 52-week highest and lowest stock prices were US$118.02 and US$66.72, respectively. Its share volume on September 10 was 2,781,446.

The company’s sales and operating revenue were US$11.56 billion in Q2, FY21, compared to US$5.54 billion in the year-ago quarter. Its net income came in at US$2.05 billion, or US$6.13 per diluted share, compared to US$314 million, or US$0.94 per diluted share in Q2, FY20.

 


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Lockheed Martin Corporation (NYSE: LMT)

Lockheed Martin is a diversified company and serves the defense sector. It provides a range of services in aviation, weapons, technology, information security, etc.

The stock traded at US$347.00 at 12:34 pm ET on September 13, up 0.32 percent from its previous close. The stock value increased by 0.36 percent YTD. It has a market cap of US$96.18 billion, a P/E Ratio of 13.62, and a forward P/E one year of 14.75. Its EPS is US$25.51.

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Its 52-week highest and lowest stock prices were US$399.60 and US$319.81, respectively. Its share volume was 1,222,611 on September 10.

The company's net sales were US$17.02 billion in Q2, FY21, compared to US$16.22 billion in the year-ago quarter. Its net earnings came in at US$1.81 billion, or US$6.52 per diluted share, compared to US$1.62 billion, or US$5.79 per diluted share in Q2, FY20. The company expects its full-year net sales to be between US$67.30 billion and US$68.70 billion in FY21.

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Bottomline

Markets have been optimistic about a speedy economic recovery. Although the stimulus tapering concerns and threats from the Delta variant will remain in the short term, most economists provided a positive outlook for the economy in the months to come. It should boost investors' confidence. Also, Fed's two-day meeting, starting on Sep 21, will be their major focus.

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