Recession fears are rampant in the face of widespread macroeconomic headwinds. By the end of 2023, the unemployment rate is expected to reach 4.4%. However, while a recession appears to be on the horizon, it is expected to be mild.
Moreover, following favorable October and November inflation data, the Fed slowed the pace of rate hikes by announcing a 50-basis-point increase in December. Nonetheless, the market is expected to remain volatile as the Fed hinted at continuing rate hicks through 2023.
Under such circumstances, dividend stocks could be ideal investment options because they offer consistent returns even in uncertain times. Investors' interest in dividend stocks is evident from the SPDR S&P Dividend ETF's (SDY) 11.5% returns over the past three months and 4.3% over the past six months.
Given the backdrop, fundamentally sound dividend stocks Pfizer Inc. (PFE), ICL Group Ltd (ICL), and Sisecam Resources LP (SIRE) could be ideal buys now for passive income.
Pfizer Inc. (PFE)
PFE discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. The company serves wholesalers, retailers, hospitals, clinics, government agencies, pharmacies, individual provider offices, and disease control and prevention centers.
On December 14, 2022, PFE and China Meheco Group Co Ltd. (China Meheco) signed an agreement under which China Meheco will import and distribute PFE's oral COVID-19 treatment Paxlovid in mainland China amid the resurgence of covid cases. This deal is expected to boost the company's revenue streams.
Also, on December 8, 2022, PFE and BioNTech SE (BNTX) achieved the U.S. Food and Drug Administration's Emergency Use Authorization for their Omicron BA.4/BA.5-adapted bivalent COVID-19 vaccine. This marks a significant achievement for the companies.
PFE has paid dividends for 33 consecutive years. Over the last three years, PFE's dividend payouts have grown at a 5.5% CAGR. While PFE's four-year average dividend yield is 3.63%, its current dividend translates to a 3.21% yield.
PFE's income from continuing operations came in at $8.65 billion for the third quarter ended October 2, 2022, up 5.8% year-over-year. Its net income came in at $8.61 billion, up 5.7% year-over-year, while its EPS came in at $1.51, up 6.3% year-over-year.
Analysts expect PFE's revenue to increase 23.3% year-over-year to $100.24 billion in 2022. The stock's EPS is estimated to grow 46.4% year-over-year to $6.47 in 2022. It surpassed EPS estimates in all four trailing quarters. Over the past three months, the stock has gained 16% to close the last trading session at $51.13.
PFE's POWR Ratings reflect this promising outlook. The company has an overall rating of A, equating to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
PFE has a B grade for Growth, Value, Sentiment, and Quality. Within the Medical - Pharmaceuticals industry, it is ranked #2 out of 159 stocks. Click here for the additional POWR Ratings for Momentum and Stability for PFE.
ICL Group Ltd (ICL)
Headquartered in Tel Aviv, Israel, ICL is a global specialty minerals and chemicals company. It operates in four segments: Industrial Products; Potash; Phosphate Solutions; and Innovative Ag Solutions (IAS).
On October 21, 2022, ICL launched ICLeaf, a revolutionary diagnostics tool that provides farmers with a personal prescription for maximizing yield. The device measures ten different elements in a leaf sample and then delivers accurate, real-time feedback and a recommendation regarding nutrient use.
With this new launch, the company expands its digital suite in India, which is expected to benefit farmers to improve crop yields and advance sustainable agriculture.
ICL has paid dividends for four consecutive years. Over the last three years, ICL's dividend payouts have grown at a 61.9% CAGR. ICL's four-year average dividend yield is 4.02%, and its current dividend translates to a 13.18% yield.
ICL's sales came in at $2.52 billion for the third quarter that ended September 30, 2022, up 40.7% year-over-year. Its net income came in at $633 million, up 181.3% year-over-year, while its EPS came in at $0.49, up 188.2% year-over-year.
Street expects ICL's revenue to increase 46.2% year-over-year to $10.17 billion in 2022. Its EPS is estimated to grow 190.6% year-over-year to $1.86 in 2022. It has surpassed EPS estimates in three out of four trailing quarters. ICL's shares have lost marginally intraday to close the last trading session at $7.37.
ICL has an overall rating of A, equating to a Strong Buy in our POWR Ratings system. It has an A grade for Value and a D for Growth and Quality. It is ranked #1 among 28 stocks in the Agriculture industry.
Click here to access the additional POWR Ratings for ICL (Stability, Momentum, and Sentiment).
Sisecam Resources LP (SIRE)
SIRE 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, chemicals, paper, and other consumer and industrial products.
On October 29, 2022, Ertugrul Kaloglu, CEO, said, "The Sisecam Resources team delivered another successful quarter adding to strong year-to-date results mostly driven by strong pricing and demand in the soda ash market globally."
Over the last three years, SIRE's dividend payouts have grown at 10.7% CAGR. While SIRE's four-year average dividend yield is 7.15%, its current dividend translates to a 9.35% yield.
SIRE's net sales came in at $190.50 million for the third quarter that ended September 30, 2022, up 40.5% year-over-year. Its operating income came in at $32.8 million, up 295.2% year-over-year. Moreover, its net income came in at $15.40 million, up 108.1% year-over-year.
Over the past year, the stock has gained 23.2% to close the last trading session at $21.02.
It's no surprise that SIRE has an overall A rating, equating to a Strong Buy in our POWR Ratings system. It has an A grade for Growth and Quality and a B for Value, Stability, and Sentiment. It is ranked first among 90 stocks in the B-rated Chemicals industry.
Beyond what is stated above, we've also rated SIRE for Momentum. Get all SIRE ratings here.
PFE shares were trading at $51.26 per share on Wednesday morning, up $0.13 (+0.25%). Year-to-date, PFE has declined -10.37%, versus a -18.21% rise in the benchmark S&P 500 index during the same period.
About the Author: RashmiKumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.
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