The stock market is expected to remain under pressure as inflation still remains elevated, which could prompt the Federal Reserve to raise interest rates aggressively. Therefore, we think it could be wise to invest in fundamentally sound stocks, ICL Group (ICL), Sisecam (SIRE), and Educational Development (EDUC), which pay dividends yielding more than 9% at their current price levels. Read on….
Even though there was a slight decline in inflation in July from the 40-year high, it still remains elevated. This, along with a robust job market, could encourage the Fed to continue maintaining its hawkish stance to bring inflation down to its target level.
According to the “second” estimate released by the Bureau of Economic Analysis, GDP decreased at an annual rate of 0.6 percent in the second quarter of 2022. Real GDP fell 1.6% in the first quarter.
The economic contraction for two straight quarters and a possible hawkish Fed could keep the stock market under pressure in the near term.
Therefore, we think it could be wise to invest in fundamentally sound stocks ICL Group Ltd (ICL), Sisecam Resources LP (SIRE), and Educational Development Corporation (EDUC), which pay dividends yielding more than 9% at their current price levels. These stocks are also rated Strong Buy in our proprietary POWR Ratings system.
ICL Group Ltd (ICL)
Headquartered in Tel Aviv, Israel, ICL operates as a specialty minerals and chemicals company worldwide. It has four operating segments: Industrial Products; Potash; Phosphate Solutions; and Innovative Ag Solutions (IAS).
This month, ICL, a leading computational biology company based on revolutionizing product discovery and development in multiple life-science-based industries, announced a multi-year, strategic partnership agreement between ICL and Lavie Bio Ltd., a subsidiary of Evogene.
Lavie Bio emphasizes improving food quality, sustainability, and agriculture productivity by introducing microbiome-based products.
ICL’s quarterly dividend of $0.29 is payable on September 14, 2022. Its $1.17 annual dividend yields 11.1% at the current share price. Also, it has a four-year average dividend yield of 3.37%. Its dividend payouts have increased at an 81.2% CAGR over the past five years.
For the second quarter ending June 30, 2022, ICL’s sales increased 78% year-over-year to $2.88 million. Its operating income increased 369% from its year-ago value to $1.14 billion, while its net income grew 302% year-over-year to $563.00 million. The company’s EPS increased 300% from the year-ago value to $0.44.
Analysts expect ICL’s revenue to increase 48.6% year-over-year to $2.66 billion for the third quarter ending September 2022. The company’s EPS is expected to grow 178.2% year-over-year to $0.46 for the third quarter ending September 2022. The stock has gained 58% over the past year and 18.8% over the past nine months.
ICL’s POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to Strong Buy in our rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock also has an A grade for Growth and a B for Quality and Value. Within the Agriculture industry, it is ranked #2 of 41 stocks.
Click here to see additional POWR Ratings for Sentiment, Stability, and Momentum for ICL.
Sisecam Resources LP (SIRE)
Headquartered in Atlanta, Georgia, SIRE is a subsidiary of Sisecam Chemicals Wyoming LLC. Together with its subsidiaries, the company engages in the trona ore mining and soda ash production businesses internationally. It processes trona ore into soda ash, a raw material in flat glass, container glass, detergents, chemicals, paper, and other consumer and industrial products.
SIRE paid a quarterly dividend of $0.50 on August 23, 2022. SIRE’s $0.76 annual dividend yields 9.20% at the current share price. Also, it has a four-year average dividend yield of 7.12%. Its dividend payouts have increased at a 3.13% CAGR over the past three years.
During the second quarter ending June 30, 2022, SIRE’s net sales increased 27.9% year-over-year to $163.4 million. Its operating income grew 56.7% from its year-ago value to $189.10 million, while its net income amounted to $15.40 million, up 431% from its prior-year quarter. The company’s EPS grew 406.7% year-over-year to $0.76.
Analysts expect SIRE’s revenue to increase 352.3% year-over-year to $2.44 billion for fiscal 2022. The stock has gained 76.5% over the past year.
SIRE’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy. The stock also has an A grade for Growth and a B for Sentiment and Stability. Within the Chemicals industry, it is ranked #1 of 89 stocks.
In total, we rate SIRE on eight different levels. Beyond what we’ve stated above, we have also given SIRE grades for Growth, Value, and Momentum. Get all the SIRE ratings here.
Educational Development Corporation (EDUC)
EDUC operates as a trade co-publisher of educational children’s books in the United States. It has two operational segments, Publishing and Usborne Books & More (UBAM). The company offers various books, including touchy-feely board books, activity books and flashcards, adventure and search books, art books, sticker books, foreign language books, and internet-linked books.
In the first quarter ending May 31, 2022, EDUC’s net revenues amounted to $23.16 million. The company’s earnings before income taxes amounted to $0.28 million for the quarter. Its net earnings came in at $1.36, while its EPS stood at $0.03 for the period.
EDUC’s trailing-12-month gross profit margin of 67.80% is 84.7% higher than the industry average of 36.70%.
EDUC’s $0.40 annual dividend yields 12.9% at the current share price.
It is no surprise that EDUC has an overall A rating, equating to Strong Buy in our POWR Ratings system. EDUC has a B grade for Momentum, Value, and Quality. In the Entertainment – Publishing industry, it is ranked #1 of 11 stocks
Click here to see the additional POWR Ratings for EDUC (Growth, Stability, and Sentiment).
ICL shares were unchanged in premarket trading Friday. Year-to-date, ICL has gained 16.56%, versus a -11.02% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan’s is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.