MSFT to INTU: Five stocks to watch in the current relief rally

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MSFT to INTU: Five stocks to watch in the current relief rally

 MSFT to INTU: Five stocks to watch in the current relief rally
Image source: © Embe2006 | Megapixl.com

Highlights:

  • Microsoft (NASDAQ: MSFT) declared a June quarterly dividend of US$0.62 per share.
  • Accenture (NYSE: ACN) to acquire silicon design company XtremeEDA.
  • IBM (NYSE: IBM) unveiled an AI tool to watch Wimbledon on its cloud platform.

The US stock market has been going through a rough patch this year, besieged by record-high inflation and other negative macroeconomic factors. The May CPI inflation jumped to 8.6%, a fresh 40-year high. This sharp rise has spurred the Federal Reserve to go on a war footing against price rise. It has already raised the interest rates in March, May, and June by 0.25%, 0.50% and 0.75%, respectively, and more hikes are due. Economists expect the bank might further raise the rates by 50 or 75 basis points at its July policy meeting.

Technology has been one of the worst performers amid rate fears, although there has been optimism that hikes could help control the disruptive inflation. Higher oil prices may have made the situation worse. Here we discuss five falling stocks that surged after the recent hikes.

Microsoft Corporation (NASDAQ: MSFT)

Price range in one year: US$349.67 to US$241.51

Redmond, Washington-based Microsoft is one of the largest software companies globally. It develops and licenses consumer and enterprise software. The company’s operating segments are productivity and business processes, intelligence cloud, and personal computing. 

Like other information technology stocks, MSFT also fell around 20.03% YTD. But the stock surged by 5.50% over the past week.

On June 14, it declared a quarterly dividend of US$0.62 per share payable on September 8, 2022, to shareholders of record on August 18, 2022. 

For the quarter ended March 31, 2022, its revenue was US$49.3 billion compared to US$41.7 billion in the same quarter a year ago. Its net income was US$16.7 billion or US$2.22 per diluted share compared to US$15.4 billion or US$2.03 per diluted share in the March quarter of 2021.

The stock has a market capitalization of US$1.98 trillion. Its dividend yield is 0.93%, and the annualized dividend is US$2.48. Its P/E ratio is 27.67, and the forward PE for one year is 28.85.

The MSFT stock closed at US$267.7 on June 24, 2022.

Accenture plc (NYSE: ACN)

Price range in one year: US$417.37 and US$268.17

The Dublin, Ireland-based IT company provides consulting, technology, and operational services. Its products are used in different sectors, including media and technology, financial services, health, communications, public services, and consumer products.

On June 27, it announced plans to acquire the silicon design company XtremeEDA to help expand its Canada and US operations.

For the quarter ended May 31, 2022, its revenue was US$16.1 billion versus US$13.2 billion for the previous year. Its net income for the quarter was US$1.8 billion or US$2.79 per diluted share compared to US$1.6 billion or US$2.40 per share diluted in the same quarter in 2021. 

The stock has a market capitalization of US$185 billion. It has a dividend yield of 1.3%, and the annualized dividend is US$3.88. Its P/E ratio is 28.43, and the forward PE for one year is 28.03.

ACN stock closed at US$299.37 on June 24, 2022.

International Business Machines Corporation (NYSE: IBM)

 
Price range in one year: US$147.50 to US$114.56

IBM covers almost all aspects of enterprise IT needs. Its offerings range from software and consulting to hardware. The Armonk, New York-based company handles roughly 90% of all credit card transactions and around 50% of all wireless connections worldwide.

On June 21, the company unveiled its AI tool to watch Wimbledon on its cloud platform.

For the March quarter of 2022, its net income was US$733 million on revenue of US$14.2 billion, while the net income and revenue for the quarter were US$955 million and US$13.2 billion, respectively. The EPS diluted was US$0.82 versus US$1.07 a year ago. 

The stock has a market capitalization of US$128.5 billion. It has a dividend yield of 4.65% and an annualized dividend of US$6.60. Its P/E ratio is 23.42, and the forward PE for one year is 14.36. The IBM stock closed at US$142.06 on June 24. 

Intuit Inc. (NASDAQ: INTU)

 
Price range in one year: US$716.86 to US$339.36

The Mountain View, California-based Intuit provides small-business accounting software, personal tax solutions, and professional tax offerings. 

The company booked revenue of US$5.6 billion for the quarter ended April 30, 2022, compared to US$4.17 billion in the same quarter the previous year. 

Its net income was US$1.8 billion or US$6.28 per diluted share compared to US$1.46 billion or US$5.30 per diluted share in the April quarter of 2021. 

The stock has a market capitalization of US$114.3 billion. It has a dividend yield of 0.65% and an annualized dividend of US$2.72. Its P/E ratio is 45.98, and the forward PE for one year is 50.81. INTU stock closed at US$417.62 on June 24, 2022. 

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Automatic Data Processing, Inc. (NASDAQ: ADP)

 
Price range in one year: US$248.96 to US$192.26

ADP provides payroll and human capital management solutions. It is based in Roseland, New Jersey. It offers payroll, HR outsourcing, HCM solutions, insurance, and retirement services. 

For the quarter ended March 31, 2022, the company generated revenue of US$4.5 billion compared to US$4.1 billion in the same quarter a year ago. 

Its net income came in at US$928 million or US$2.21 per share diluted compared to US$810.7 million or US$1.90 per share diluted in the March quarter of 2021. 

The stock has a market capitalization of US$91.4 billion. It has a dividend yield of 1.9%, and the annualized dividend is US$4.16. Its P/E ratio is 32.34, and the forward P/E for one year is 31.39.

ADP stock closed at US$218.79 on June 24, 2022.

Bottom line:

Analysts expect that the volatility in the stock market will subside by the end of 2022. However, investors should carefully analyze the companies before investing in stocks.

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