Kalkine Media lists US stocks to watch as interest rates rise again
M&T Bank Corporation (NYSE: MTB), Dollar General Corporation (NYSE: DG) and UnitedHealth Group Incorporated (NYSE: UNH) are the companies that have so far managed to stay in the green.
Soaring prices have hurt the sentiments of market participants and policymakers alike lately.
The Federal Reserve raised key rates to their highest level in about 15 years on Wednesday, September 21 to keep inflation under control. The central bank announced another three-quarters of a percentage point hike for the third time in September, bringing its projection range between 3% and 3.25%.
Let’s take a look at these stocks in a sloppy investment environment and see how they have performed so far in the looming economic difficulties:
M&T Bank Corporation (NYSE:MTB)
M&T Bank is one of the leading banks with a dividend yield of 2.56%. The US$32.6 billion company provides banking, lending and other investment-related services to its clients.
ATV stock has jumped about 20% year-to-date while gaining about 39% year-over-year. In the current quarter, it climbed about 16%. The bank holding company’s stock hit a 52-week high of $193.42 on August 16, 2022.
Meanwhile, on September 21, the New York-based bank announced that it had raised its prime rate from 5.5% to 6.25%, effective September 22.
The company’s board of directors has decided to pay a quarterly cash dividend of $1.2 on its common stock, payable September 30 this year.
M&T Bank’s total revenue jumped 11% year-on-year to US$571.1 million in the second quarter of FY22, while its net income fell 53% year-on-year to US$217.52 million. US dollars during the quarter.
Dollar General Corporation (NYSE:DG)
Dollar General is a variety store operator with a dividend yield of 0.9%. The $54.2 billion market capitalization company operates a chain of discount stores.
The variety store chain operator’s inventory is up about 1% year-to-date while rising about 9% year-to-date.
Dollar General Corporation’s revenue climbed 9% year-over-year to $9.4 billion in the second quarter of fiscal 2022. The Goodlettsville, Tennessee-based company’s net income soared 6.4% year-on-year to US$678 million in the second quarter of FY22.
Source: ©Kalkine Media®; © Canva Creative Studio via Canva.com
UnitedHealth Group Incorporated (NYSE: UNH)
UnitedHealth Group is a leading managed health care and insurance company with a dividend yield of 1.26%. The stock of the US$478.99 billion market capitalization company is up about 1% year-to-date while jumping 24% year-on-year.
In the second quarter of FY22, UnitedHealth Group’s revenue climbed 13% year-on-year to US$80.3 billion. Its net profit rose to US$5.19 billion in the second quarter of FY22 from US$4.37 billion a year ago.
At the end of the line
Although there are no guarantees, financial stocks, especially banks and insurers, tend to perform well even in a higher rate scenario. Additionally, due to higher costs and interest rates, consumers tend to shift their spending to discount stores to save money, which generally benefits discount store operators.
But, given the highly volatile global market and the Fed’s indications of further aggressive hikes in the coming months, it is difficult to predict the future state of the market.
Therefore, traders should do their due diligence before taking any action due to persistent macroeconomic headwinds.