4 Beaten-Down Dividend Growth Stocks to Scoop Up Now

The major benchmark indices registered solid gains on Tuesday, posting their best day since March 16. The Nasdaq Composite jumped 2.2%, while the Dow Jones Industrial Average rose 499.51 points or 1.5%, and the S&P 500 gained 1.6%, with 10 out of 11 sectors ending the session in the green.

However, the International Monetary Fund (IMF) reduced its economic growth forecasts and warned of higher inflation. The organization lowered its global economic growth forecast by nearly a full percentage point, citing Russia’s invasion of Ukraine and the rising inflation in several countries. And according to St. Louis Federal Reserve Bank President James Bullard, U.S. inflation is “far too high.” He is encouraging the increase of interest rates to 3.5% by the end of the year to slow the inflation readings.

Given the market uncertainty, we think dividend stocks J.B. Hunt Transport Services, Inc. (JBHT), Danaher Corporation (DHR), Choice Hotels International, Inc. (CHH), and Ralph Lauren Corporation (RL) could be ideal additions to one’s portfolio to ensure a stable stream of income. This year, these stocks have declined in price but could potentially rebound in the near term.

J.B. Hunt Transport Services, Inc. (JBHT)

JBHT in Lowell, Ark., provides surface transportation, delivery, and logistic services. It operates through five segments: Intermodal (JBI); Dedicated Contract Services (DCS); Integrated Capacity Solutions (ICS; Final Mile Services (FMS); and Truckload (JBT).

On April 4, 2022, JBHT announced the launch of CLEAN Transport, a program that will help customers reduce the carbon footprint created by their shipments. “Many of our customers are working towards short- and long-term sustainability goals and CLEAN Transport will serve as a great extension of the efforts they’re already taking to reduce the carbon footprint of their supply chain,” said Craig Harper, chief sustainability officer and executive vice president at JBHT.

In March, JBHT and BNSF Railway Company launched a joint venture to substantially improve capacity in the intermodal marketplace, which has grown significantly over the past year, along with meeting the expanding needs of their current customers. This is expected to provide consistent and reliable intermodal and transloading services to the customers and comes in tandem with JBHT’s mission to create the most efficient transport network in North America.

JBHT’s $1.60 annual dividend yields 0.93% at its current share price. The company paid its last quarterly dividend of $0.40 on Feb.18, 2022. Its dividend payouts have increased at a 9.9% CAGR over the past three years and 7.9% over the past five years. It has a dividend growth record of eight consecutive years.

JBHT’s total operating revenues increased 33.2% from the prior-year quarter to $3.49 billion in its fiscal quarter ended March 31, 2022. Its operating income for the quarter came in at $334.29 million, reflecting a 61% increase year-over-year, while the net earnings stood at $243.33 million, up 66% year-over-year. Its EPS increased 67.2% from its year-ago value to $2.29.

The $2.31 consensus EPS estimate for its fiscal first quarter, ending June 30, 2022, represents a 43.5% improvement year-over-year. The $3.57 billion consensus revenue estimate for the same quarter represents a 22.7% increase from the same period last year. It has an impressive earnings surprise history; it topped the Street’s EPS estimates in each of the trailing four quarters.

Over the past nine months, the stock has gained 8.9% in price to close yesterday’s trading session at $173.88. However, the stock has slumped 14.9% year-to-date.

JBHT’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which translates to Strong Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

JBHT also has a B grade in Growth, Sentiment, and Momentum. It is ranked #9 of 22 stocks in the A-rated Trucking Freight industry.

Beyond what is stated above, we have also rated JBHT for Quality, Value, and Stability. Get all the JBHT ratings here.

Danaher Corporation (DHR)

DHR designs, manufactures, and markets professional, medical, industrial, and commercial products and services worldwide. It operates through three segments Life Sciences; Diagnostics; and Environmental & Applied Solutions. DHR is headquartered in Washington, D.C.

Its $1.00 annual dividend yields 0.36% at its current share price. On Feb.23, 2022, DHR declared a $0.25 per share quarterly dividend, payable on April 29, 2022. Its dividend payouts have increased at a 10.6% CAGR over the past three years and 11.5% over the past five years. It has a dividend growth record of 13 consecutive years.

DHR’s sales increased 20.5% year-over-year to $8.15 billion in its fiscal quarter ended Dec. 31, 2021. Its operating profit grew 34.5% from its year-ago value to $2.15 billion, while the net earnings increased 44.1% year-over-year to $1.79 billion over the period. Also, its net EPS came in at $2.39, up 44% from the prior-year quarter.

Analysts expect DHR’s revenue for the fiscal quarter ended March 31, 2022, to come in at $7.53 billion, indicating a 9.8% increase year-over-year. The company’s EPS is expected to grow 5.7% year-over-year to $2.66 in the same period. DHR also beat the consensus EPS estimates in the trailing four quarters.

DHR stock has gained 12.9% in price over the past year and slumped 17% year-to-date to close the last trading session at $273.10.

It is no surprise that DHR has an overall rating of B, equating to Buy in our POWR Ratings system.

DHR has an A grade in Sentiment and a B in Growth and Stability. Among the 159 stocks in the Medical - Devices & Equipment industry, DHR is ranked #34.

In addition to the POWR Rating grades I have just highlighted, you can see the DHR’s value, Momentum, and quality ratings here.

Click here to checkout our Healthcare Sector Report for 2022

Choice Hotels International, Inc. (CHH)

CHH operates as a hotel franchisor worldwide through its Hotel Franchising and Corporate & Other segments. The Rockville, Md.-based company also develops and markets cloud-based property management software to non-franchised hoteliers. As of Dec. 31, 2021, it had 7,030 hotels with 579,746 rooms worldwide.

CHH announced its collaboration with IDeaS, a leading SAS company that provides hospitality revenue management software and services. Through this collaboration, IDeaS will develop ChoiceMax, a mobile-first revenue management solution for quick implementation, immediate efficiency, and increased revenues. This is expected to help CHH drive commercial success and enable franchisee revenue growth across its global enterprise of more than 7,000 hotels.

On April 4, 2022, CHH added a new property with the opening of the Cambria Hotel Austin Airport, one of the first hotels to open in Austin. This should add a new revenue stream for the company, while expanding its market reach.

CHH’s $0.93 annual dividend yields 0.67% at its current share price. The company paid its last quarterly dividend of $0.24 on April 15, 2022. Its dividend payouts have increased at a 2.5% CAGR over the past three years and 2% over the past five years.

For its fiscal fourth quarter, ended Dec.31, 2021, CHH’s total revenues increased 47.2% year-over-year to $284.64 million. Its operating income grew 555.4% from the year-ago value to $106.81 million. And its net income for the quarter stood at $64.08 million, reflecting a 714.8% increase year-over-year, while its EPS grew 714.3% to $1.14.

The Street expects CHH’s EPS for its fiscal quarter ended March 31, 2022, to improve 56.2% year-over-year to $0.89. The $250.89 million consensus revenue estimate for the same period represents a 37.1% increase year-over-year. The company also surpassed the consensus EPS estimates in three of the trailing four quarters.

CHH’s shares have gained 32.5% in price over the past year to close the last trading session at $147.58. The stock slumped 5.4% year-to-date.

CHH’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our POWR Ratings system.

The company has an A grade in Quality and a B in Growth. The stock is ranked #5 out of the 22 stocks in the Travel- Hotels/Resorts industry.

To get CHH’s ratings for Value, Momentum, Stability, and Sentiment, click here.

Note that CHH is one of the few stocks handpicked by our Chief Growth Strategist, Jaimini Desai, currently in the POWR Growth portfolio. Learn more here.

Ralph Lauren Corporation (RL)

New York City’s RL designs, markets, and distributes lifestyle products, including apparel, accessories, home furnishings, fragrances, and hospitality. The company operates through North America; Europe; and Asia segments.

RL has collaborated with Skyscrape, a textile innovation company, to introduce a ground-breaking and first-to-market apparel innovation with Intelligent Insulation. The technology expands the lifespan and use of garments by creating a sustainably minded temperature-responsive fabric. This is in line with its commitment to bringing revolutionary innovations in apparel.

Its $2.75 annual dividend yields 2.53% at its current share price. On March 18, 2022, RL declared a quarterly dividend of $0.69 per share, which was payable on April 15, 2022. Its dividend payouts have increased at a 3.2% CAGR  over the past three years and 6.6% over the past five years.

RL’s net revenues have increased 26.7% year-over-year to $1.82 billion in its fiscal third quarter, ended Dec. 25, 2021. Its gross profit increased 28.8% to 1.20 billion for the same period last year, while the operating income was $289.10 million, up 69.7% year-over-year. Its EPS has increased 82% from its year-ago value to $2.93.

RL’s revenue for the fourth quarter, ended March 31, 2022, is expected to come in at $1.46 billion, indicating a 13.3% year-over-year growth. The company’s EPS is expected to increase marginally year-over-year to $0.38 for the same quarter. RL topped the Street’s EPS estimates in each of the trailing four quarters, which is impressive.

RL’s stock has slumped 5.1% in price year-to-date to close the last trading session at $112.81. However, it gained 8.7% over the past nine months.

RL’s POWR Ratings reflect this promising outlook. The company has an overall B rating. Which translates to Buy in our proprietary rating system.

RL is rated A in Quality and B in Growth and Value. It is ranked #13 of 66 stocks in the A-rated Fashion & Luxury Industry.

To see additional POWR Ratings for Momentum, Stability, and Sentiment for RL, click here.

JBHT shares were trading at $174.58 per share on Wednesday morning, up $0.70 (+0.40%). Year-to-date, JBHT has declined -14.41%, versus a -6.05% rise in the benchmark S&P 500 index during the same period.

Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.

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