Kalkine Media explores five S&P 500 stocks to watch in October

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Kalkine Media explores five S&P 500 stocks to watch in October

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 Kalkine Media explores five S&P 500 stocks to watch in October
Image source: © Panteleev83 | Megapixl.com

Highlights:

  • Occidental Petroleum Corporation (NYSE: OXY) stock jumped more than 100 per cent YTD.
  • McKesson Corporation (NYSE: MCK) revenue rose seven per cent YoY in Q1 FY23.
  • Northrop Grumman Corporation (NYSE: NOC) touched its 52-week high price on September 21, 2022.

The S&P 500 index tumbled to its lowest level recently as market volatility continues worldwide. Meanwhile, Occidental Petroleum Corporation (NYSE: OXY), McKesson Corporation (NYSE: MCK), Nielsen N.V. (NYSE: NLSN), CF Industries Holdings, Inc. (NYSE: CF), and Northrop Grumman Corporation (NYSE: NOC), are among the S&P 500 constituents that have managed to stay in the green despite a slump in the overall index.

The recent macroeconomic headwinds have left the investors petrified while forcing them to avoid spending on risk-bet assets, as seen by the market's recent momentum. Meanwhile, all the indices have retreated significantly in recent days due to higher inflation, increased policy rates by the central bank, and lingering concerns over economic growth.

The Federal Reserve has consistently increased interest rates to fight the decades-high inflation, which has cooled off demands while weighing on economic growth. The investors are anticipating that the harsh steps by the central bank could trigger a recession in the coming days.

However, the policymakers indicated that they would keep backing the rate hikes to bring down the higher costs to their target level, even if it tips the economy into a recession.

The summer rally with optimism over positive second-quarter earnings and hopes that the Fed may turn dovish with their monetary support was jolted by the elevated inflation data of August. The latest move is another jumbo-rise of 0.75 points in the interest rates by the central bank in September.

Now, let's explore the recent performance and earnings highlights of the S&P 500 constituents amid sloppy trading in the broader market:

Occidental Petroleum Corporation (NYSE: OXY)

Occidental Petroleum is a leading oil and gas corporation with a dividend yield of 0.89 per cent. The company primarily focuses on hydrocarbon exploration operations.

The stock of the US$ 54.03 billion market cap firm added nearly 101 per cent YTD while jumping about 93 per cent YoY. However, in the running quarter, it decreased by about one per cent through September 27. Regarding its price performance, the OXY stock reached its 52-week high of US$ 77.12 on August 29.

Occidental Petroleum's revenue was US$ 10.73 billion in Q2 FY22, compared to US$ 6.01 billion in the preceding year's same quarter. The oil and gas firm's net income was US$ 3.75 billion in the last quarter, a surge from US$ 103 million in Q2 FY21.

In the second quarter of fiscal 2022, Occidental Petroleum said it repaid US$ 4.8 billion in debt, representing 19 per cent of the total outstanding principal.

McKesson Corporation (NYSE: MCK)

McKesson Corporation is a healthcare company with a dividend yield of 0.63 per cent. With a P/E ratio of 36.26, the company distributes pharmaceutical products and provides healthcare technology, supplies, and other related services.

The US$ 49.36 billion market cap firm's stock rose about 38 per cent YTD while gaining about 68 per cent YoY and five per cent QTD. The stock price of MCK hit its 52-week high of US$ 375.225 on August 16, 2022.

Among its recent developments, the Texas-based healthcare firm said it had signed a definitive agreement to acquire RX Savings Solutions for a deal value of up to US$ 875 million.

In Q1 2023, McKesson Corporation's revenue increased by seven per cent YoY to US$ 67.2 billion, while its diluted EPS rose 70 per cent YoY to US$ 5.25.

Meanwhile, it has upgraded its fiscal 2023 guidance range for its adjusted diluted EPS to US$ 23.95 to US$ 24.95, from its prior guidance range of US$ 22.90 to US$ 23.6.

Nielsen N.V. (NYSE: NLSN)

Nielsen is a data and market measurement firm with a P/E ratio of 18.9. The company, which operates in over 55 countries, had a dividend yield of 0.86 per cent.

The stock price of the US$ 10 billion market cap media company jumped about 35 per cent YTD while rising over 40 per cent YoY. Talking about its QTD performance, its price rose over 19 per cent through September 27. The NLSN stock's 52-week highest price of US$ 27.92 was noted on August 31 this year.

On a reported basis, Nielsen's revenue rose 2.4 per cent YoY to US$ 882 million in Q2 FY22, while its diluted EPS was US$ 0.31, up from US$ 0.21 per share in Q2 FY21.

CF Industries Holdings Inc. (CF) Q2 FY22 earnings highlightsSource: ©Kalkine Media®; © Canva via Canva.com

CF Industries Holdings, Inc. (NYSE: CF)

CF Industries Holdings is a fertilizer company with a dividend yield of 1.71 per cent. With a P/E ratio of 7.84, the company manufactures agricultural fertilizers like ammonia, urea, and other related products.

The price of the CF stock jumped 34 per cent YTD and 69 per cent YoY. In the running quarter through September 27, its price soared over ten per cent.

CF Industries' total sales were US$ 3.38 billion for the three months ended on June 30 this year, compared to US$ 1.58 billion in the year-ago period. The fertilizer company's net income was US$ 1.16 billion in Q2 FY22 versus US$ 246 million in Q2 FY21.

Northrop Grumman Corporation (NYSE: NOC)

Northrop is an aerospace and defense firm with a dividend yield of 1.45 per cent. The company, with a P/E ratio of 13.21, offers its services in space, aeronautics, defense, and other related sectors.

The stock price of the US$ 73.29 billion market cap firm shot up about 22 per cent YTD while increasing around 33 per cent YoY. However, on a QTD basis, the stock of the aerospace and defense firm traded flat.

The NOC stock had gained attention in the market in recent weeks, evident by its 52-week high of US$ 515.4899 noted on September 21 this year. The Falls Church, Virginia-based defense firm said it would release its Q3 FY22 earnings results on October 27.

In the last quarter, Northrop Grumman's revenue was US$ 8.80 billion, and its net income was US$ 946 million. Both the metrics declined from the same quarter of the prior year, while its revenue was US$ 9.15 billion, and its net earnings were US$ 1.03 billion.

Bottom line

The S&P 500 and Dow Jones have notched their lowest level in 2022 in the running week, while Dow confirmed its place in the bear market on September 26. S&P 500 slipped to 3,655.04 on Monday, September 26, down from its lowest level of 3,666.77 in June.

In the intraday trading on September 26, it fell to about 3,644.7, down from its earlier intraday low of this year of 3,636.8.

Exploring the performance of the S&P 500 in the last 12 months, it dropped by about 18 per cent while declining more than 23 per cent in 2022 through September 27.

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