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Chicago, IL – May 9, 2022 – Today, Zacks Investment Ideas feature highlights Tesla (TSLA - Free Report) , Apple (AAPL - Free Report) , Devon Energy Corp. (DVN - Free Report) , ZIM Integrated Shipping Services (ZIM - Free Report) , and Eagle Bulk Shipping Inc. .
Defense Wins Ballgames: 3 Stocks to Bulletproof Your Portfolio
It's no secret that 2022 has been rough sailing in the market. Supply chain bottlenecks, soaring energy prices, geopolitical issues, and a hawkish Fed have turned investors' sentiment sour, slashing the valuations of many companies.
When sailing through rough waters, investors must blend a higher level of defense into their portfolios to prevent their ships from taking on water. Believe it or not, there have been plenty of stocks throughout 2022 that have yielded investors considerable gains while easily outpacing the general market.
Generally, companies that perform well during drawdowns aren't the exciting, high-flying technology companies that investors clamor over. But what is exciting is the fact that it's still possible to find prosperity in dark times by parking your hard-earned cash in companies that have proven their ability to generate gains in adverse market conditions.
The three companies we will discuss have all easily outpaced the general market and investors' favorites such as Tesla and Apple throughout 2022.
These stocks all carry a highly-coveted Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy); the Zacks Rank is an absolute top-tier way investors can find real winners in the market. Simply put, it's one of the most powerful market tools out there.
We can see how powerful the Zacks Rank is by creating a chart that shows the year-to-date performance of all three companies vs. the S&P 500 and the widley-known companies mentioned above (TSLA, AAPL, GOOGL).
Quite the difference there, isn't it? On top of the robust share performance, all three companies have respectable dividend yields higher than 5%. Let's get into why these companies are a tremendous defensive bet.
Devon Energy
Devon Energy Corp. is an independent energy company primarily engaged in exploring, developing, and producing oil and natural gas. The company's operations are mainly concentrated in the onshore areas of North America.
DVN thoroughly enjoys rewarding its shareholders; its dividend metrics are robust. The company's dividend yield sits at 5.9%, with a very sustainable payout ratio of 13% of earnings. What sticks out to me is its dividend growth – the company has increased its dividend a whopping ten times in the past five years, giving it a five-year annualized dividend growth rate of nearly 32%.
Valuation metrics look great as well. Its current forward P/E ratio of 7.9X is nearly half its 2021 high of 14.6X. Additionally, the forward-earnings multiple currently represents a deep discount of 57% relative to the S&P 500's value.
The company's next quarterly release is looking very strong. Over the last 60 days, the Consensus Estimate Trend for the quarter has increased 42% up to $2.22 per share, boosted by eight positive estimate revisions from analysts. Additionally, there have been zero negative estimate revisions over this period. The quarterly estimate reflects an enormous growth in earnings of 270% from the year-ago quarter.
DVN is currently a Zacks Rank #1 (Strong Buy) with an overall VGM Score of a B.
ZIM Integrated Shipping Services
ZIM Integrated Shipping Services provides customers with innovative seaborne transportation and logistics services covering the world's major trade routes, focusing on select markets with competitive advantages that allow the company to maximize its market position.
ZIM has a stellar dividend yield of 29.7%, with a sustainable payout ratio at 26% of earnings. The company went public in January of 2021 and has since increased its dividend twice.
The real surge in the dividend yield occurred on March 9th when the company announced that shareholders on record as of March 22, 2022 would receive a dividend of $17 per share, much higher than the previous $2.50 per share dividend. Clearly, ZIM is dedicated to rewarding its shareholders.
ZIM has very sound valuation metrics; its current forward-earnings multiple of 1.8X screams undervalued and is well under its May 2021 high of 4.8X. In fact, the value represents a staggering 90% discount relative to the S&P 500's forward P/E of 18.5X.
For the upcoming quarterly release, the Zacks Consensus Estimate trend has increased marginally up to $12.65 per share over the last 60 days, reflecting a massive growth in earnings of nearly 150% from the year-ago quarter.
ZIM is a Zacks Rank #2 (Buy) with an overall VGM Score of an A.
Eagle Bulk Shipping
Eagle Bulk Shipping Inc. is a fully integrated shipowner-operator engaged in global transportation, focusing exclusively on the mid-size dry bulk vessel segment. It owns one of the largest fleets of Supramax/Ultramax ships globally.
EGLE's dividend yield also sits in the double-digits at 12.2%, with a payout ratio on the higher side at 63% of earnings. Additionally, the company has increased its dividend twice over the last five years, although it recently started its dividend payments in 2021.
EGLE's current forward-earnings multiple sits at a very respectable 4.1X, a fraction of its 10.3X high in May 2021 and just above its lows of 3.1X earlier this year in January. Additionally, the forward earnings multiple reflects a considerable 78% discount relative to the S&P 500.
For the quarterly report coming in August, the consensus estimate trend has climbed a notable 11%, boosted by two positive estimate revisions from analysts. The quarterly estimate reflects a sizable 40% growth in earnings from the previous quarter.
EGLE is a Zacks Rank #2 (Buy) with an overall VGM Score of an A.
Bottom Line
Investors must stack a layer of defense into their portfolios to limit drawdowns from the broader market. All three of these stocks have shown immense relative strength over 2022, increasing considerably in valuation.
Sometimes, it's difficult not to get caught up in all the high-flying tech stocks; they're exciting, fun, and innovative investments to park cash. However, the market is much broader than just tech and high-growth companies. By utilizing the Zacks Rank, we can find these winners quite easily.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Tesla, Apple, Devon Energy, ZIM Integrated Shipping Services, and Eagle Bulk Shipping
For Immediate Release
Chicago, IL – May 9, 2022 – Today, Zacks Investment Ideas feature highlights Tesla (TSLA - Free Report) , Apple (AAPL - Free Report) , Devon Energy Corp. (DVN - Free Report) , ZIM Integrated Shipping Services (ZIM - Free Report) , and Eagle Bulk Shipping Inc. .
Defense Wins Ballgames: 3 Stocks to Bulletproof Your Portfolio
It's no secret that 2022 has been rough sailing in the market. Supply chain bottlenecks, soaring energy prices, geopolitical issues, and a hawkish Fed have turned investors' sentiment sour, slashing the valuations of many companies.
When sailing through rough waters, investors must blend a higher level of defense into their portfolios to prevent their ships from taking on water. Believe it or not, there have been plenty of stocks throughout 2022 that have yielded investors considerable gains while easily outpacing the general market.
Generally, companies that perform well during drawdowns aren't the exciting, high-flying technology companies that investors clamor over. But what is exciting is the fact that it's still possible to find prosperity in dark times by parking your hard-earned cash in companies that have proven their ability to generate gains in adverse market conditions.
The three companies we will discuss have all easily outpaced the general market and investors' favorites such as Tesla and Apple throughout 2022.
These stocks all carry a highly-coveted Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy); the Zacks Rank is an absolute top-tier way investors can find real winners in the market. Simply put, it's one of the most powerful market tools out there.
We can see how powerful the Zacks Rank is by creating a chart that shows the year-to-date performance of all three companies vs. the S&P 500 and the widley-known companies mentioned above (TSLA, AAPL, GOOGL).
Quite the difference there, isn't it? On top of the robust share performance, all three companies have respectable dividend yields higher than 5%. Let's get into why these companies are a tremendous defensive bet.
Devon Energy
Devon Energy Corp. is an independent energy company primarily engaged in exploring, developing, and producing oil and natural gas. The company's operations are mainly concentrated in the onshore areas of North America.
DVN thoroughly enjoys rewarding its shareholders; its dividend metrics are robust. The company's dividend yield sits at 5.9%, with a very sustainable payout ratio of 13% of earnings. What sticks out to me is its dividend growth – the company has increased its dividend a whopping ten times in the past five years, giving it a five-year annualized dividend growth rate of nearly 32%.
Valuation metrics look great as well. Its current forward P/E ratio of 7.9X is nearly half its 2021 high of 14.6X. Additionally, the forward-earnings multiple currently represents a deep discount of 57% relative to the S&P 500's value.
The company's next quarterly release is looking very strong. Over the last 60 days, the Consensus Estimate Trend for the quarter has increased 42% up to $2.22 per share, boosted by eight positive estimate revisions from analysts. Additionally, there have been zero negative estimate revisions over this period. The quarterly estimate reflects an enormous growth in earnings of 270% from the year-ago quarter.
DVN is currently a Zacks Rank #1 (Strong Buy) with an overall VGM Score of a B.
ZIM Integrated Shipping Services
ZIM Integrated Shipping Services provides customers with innovative seaborne transportation and logistics services covering the world's major trade routes, focusing on select markets with competitive advantages that allow the company to maximize its market position.
ZIM has a stellar dividend yield of 29.7%, with a sustainable payout ratio at 26% of earnings. The company went public in January of 2021 and has since increased its dividend twice.
The real surge in the dividend yield occurred on March 9th when the company announced that shareholders on record as of March 22, 2022 would receive a dividend of $17 per share, much higher than the previous $2.50 per share dividend. Clearly, ZIM is dedicated to rewarding its shareholders.
ZIM has very sound valuation metrics; its current forward-earnings multiple of 1.8X screams undervalued and is well under its May 2021 high of 4.8X. In fact, the value represents a staggering 90% discount relative to the S&P 500's forward P/E of 18.5X.
For the upcoming quarterly release, the Zacks Consensus Estimate trend has increased marginally up to $12.65 per share over the last 60 days, reflecting a massive growth in earnings of nearly 150% from the year-ago quarter.
ZIM is a Zacks Rank #2 (Buy) with an overall VGM Score of an A.
Eagle Bulk Shipping
Eagle Bulk Shipping Inc. is a fully integrated shipowner-operator engaged in global transportation, focusing exclusively on the mid-size dry bulk vessel segment. It owns one of the largest fleets of Supramax/Ultramax ships globally.
EGLE's dividend yield also sits in the double-digits at 12.2%, with a payout ratio on the higher side at 63% of earnings. Additionally, the company has increased its dividend twice over the last five years, although it recently started its dividend payments in 2021.
EGLE's current forward-earnings multiple sits at a very respectable 4.1X, a fraction of its 10.3X high in May 2021 and just above its lows of 3.1X earlier this year in January. Additionally, the forward earnings multiple reflects a considerable 78% discount relative to the S&P 500.
For the quarterly report coming in August, the consensus estimate trend has climbed a notable 11%, boosted by two positive estimate revisions from analysts. The quarterly estimate reflects a sizable 40% growth in earnings from the previous quarter.
EGLE is a Zacks Rank #2 (Buy) with an overall VGM Score of an A.
Bottom Line
Investors must stack a layer of defense into their portfolios to limit drawdowns from the broader market. All three of these stocks have shown immense relative strength over 2022, increasing considerably in valuation.
Sometimes, it's difficult not to get caught up in all the high-flying tech stocks; they're exciting, fun, and innovative investments to park cash. However, the market is much broader than just tech and high-growth companies. By utilizing the Zacks Rank, we can find these winners quite easily.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.