The Federal Reserve is expected to announce another steep interest rate hike this week, adding to the concerns of a possible recession. Economist Nouriel Roubini believes that the U.S. is headed for a severe recession, and stocks could fall another 50%. On the contrary, few, like the veteran market strategist Ed Yardeni, feel that the bear market could be nearing an end.
Amid such uncertainties, market volatility is rife, as is evident from the CBOE Volatility Index’s 39.1% year-to-date gains. However, CNBC’s Jim Cramer opines that investors should focus on taking a long-term strategy for their portfolios.
And we think fundamentally strong stocks Greif, Inc. (GEF) and Veritiv Corporation (VRTV) are poised to pack-in solid long-term gains. Therefore, it could be wise to add these stocks to your portfolio now.
Greif, Inc. (GEF)
GEF is a global leader that produces and sells industrial packaging products and services worldwide. It operates in three segments: Global Industrial Packaging; Paper Packaging & Services; and Land Management.
On June 23, 2022, GEF announced a $150 million share repurchase program and entered into a $75 million accelerated share repurchase agreement with Bank of America, N.A. The program aims to boost the company’s shareholder returns.
GEF’s net sales came in at $1.67 billion for the second quarter, ended April 30, 2022, up 24.4% year-over-year. Its total adjusted EBITDA came in at $251 million, up 42.1% year-over-year. Also, its gross profit came in at $338.70 million, up 27.4% year-over-year.
For 2022, analysts expect GEF’s revenue to be $6.45 billion, representing a 16.1% year-over-year rise. The company’s EPS is expected to increase 35.9% year-over-year to $7.61 in 2022. Also, it surpassed the consensus EPS estimates in each of the trailing four quarters.
Over the past year, the stock has gained 18% to close the last trading session at $68.77. Moreover, the stock has gained 91.1% over the past three years.
GEF’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
Also, the stock has a B grade for Value and Quality. Within the A-rated Industrial – Packaging industry, it is ranked #3 out of 22 stocks. Click here for the additional POWR Ratings for Growth, Momentum, Stability, and Sentiment for GEF.
Veritiv Corporation (VRTV)
VRTV operates as a business-to-business provider of value-added packaging products and services, facility solutions, and print and publishing products and services in the United States and internationally. Its four segments are Packaging; Facility Solutions; Print; and Publishing and Print Management (Publishing).
On May 9, 2022, Sal Abbate, CEO, said, “Our trend of delivering consecutive record financial metrics demonstrates the consistency and sustainability of our performance. Our own delivery fleet and comprehensive distribution network remain key differentiators to both our suppliers and customers.”
VRTV’s net sales increased 19.2% year-over-year to $1.86 billion for the first quarter ended March 31, 2022. Its net income came in at $78.50 million, up 268.5% year-over-year, while its EPS came in at $5.12, up 300% year-over-year.
For 2022, analysts expect VRTV’s revenue to increase marginally year-over-year to $6.97 billion. Its EPS is expected to grow 104.2% year-over-year to $18.40 in 2022. It surpassed EPS estimates in each of the trailing four quarters.
Over the past year, the stock has gained 102% to close the last trading session at $122.70. Moreover, the stock has gained 207.9% over the past five years.
VRTV has an overall A rating, which indicates a Strong Buy in our proprietary rating system. It has an A grade for Growth and a B grade for Value.
Within the same industry, it is ranked first. Click here for the additional POWR Ratings for Momentum, Stability, Sentiment, and Quality for VRTV.
GEF shares were trading at $67.85 per share on Tuesday afternoon, down $0.92 (-1.34%). Year-to-date, GEF has gained 14.13%, versus a -17.02% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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