• Market-beating companies with good dividends and consistent earnings
• Boring old-guard companies with cheap stocks
• Big pharma is proving resilient to the recession
Jim Cramer had announced his new preference for boring stocks several times this year. Tech stocks would clearly be left behind by old-guard companies in tough economic times. Again and again he referred to companies from the healthcare sector, such as Johnson & Johnson or Eli Lilly and Company. Because the pharmaceutical industry in particular is developing particularly well in this time of crisis.
Conventional companies are less driven by competitive pressure and are currently able to win back the stock market, which is dominated by tech stocks during growth phases, thanks to independent developments. “Wall Street likes profitable companies with consistent earnings, good dividends and reasonably priced stocks,” Jim Cramer told investors on his CNBC show “Mad Money” for their 2023 shopping lists.
“The biggest winners in healthcare have been boring, consistent companies with cheap stocks,” observed Jim Cramer, listing his favorites:
Pfizer and UnitedHealth shares: Jim Cramer relies on consistency
The shares of the world’s largest pharmaceutical company, Pfizer, remain a bargain. Cramer highlighted the acquisitions of Arena Pharmaceuticals, Biohaven and Global Blood Therapeutics.
UnitedHealth named Jim Cramer the best US health insurer. In November, the company raised revenue guidance to $324 billion and confirmed earnings guidance. In 2023, the company will continue to focus on growth: According to dpa-AFX, UnitedHealth CEO Andrew Witty expects sales of between 357 and 360 billion US dollars in 2023. Analysts also see continued revenue growth ($352 billion on average) and even slightly surpassed the company’s earnings guidance ($23.15 to $23.65 per share) for the coming year with an average of $23.85 per share .
Humana and Edwards Lifesciences: Cheap stocks, stable companies
Jim Cramer certifies that the US healthcare company Humana has had a “great turnaround story”. Since the beginning of the year, Humana shares have gained around eleven percent and are currently trading at USD 514.38 (closing price on December 27, 2022).
Compared to its competitors like UnitedHealth, Humana shares have recently performed significantly worse, but were able to increase sales in the third quarter of 2022 by 9.24 percent compared to the previous year and most recently achieved earnings of USD 6.88 per share, compared to $4.84 in the same period last year. 14 out of 15 analysts at TipRanks recommend Humana as a Buy, with an average target price of $622.73.
The medical technician Edwards Lifesciences, which also has a seat near Munich, is also on Cramer’s purchase list. 14 of the company’s 22 ratings on TipRanks are a buy, with an average target price of $88.11. Edward Lifesciences shares are currently trading at $73.59 (closing price on 12/27/2022). Although the paper has lost around 43 percent since the beginning of the year, Jim Cramer describes the company’s business basis as “strong”.
Danaher Stock: Jim Cramer’s Top Pick
The “Mad Money” moderator describes the transnational conglomerate Danaher as “one of the best-run companies in any industry”. It certifies that the group, which comprises more than 400 companies worldwide, will have a brilliant development in 2023.
The group’s figures from the most recent quarter speak for consistency: Danaher paid a stable quarterly dividend of $1.00 per share for the full year in 2022. The dividend was last raised by 19 percent in February. In the third quarter of 2022, the group generated 7.66 billion US dollars, an increase of around six percent compared to the same quarter of the previous year. EPS increased from $2.39 in the prior-year period to $2.56 per share.
Nine out of eleven analysts gave the NYSE-listed stock a “buy” rating over the past three months, according to TipRanks. The median target price is $303.55; at a current price of 260.88 US dollars, an increase of around 17 percent (closing price December 27, 2022). According to CNBC, Cramer’s Charitable Trust owns shares in Danaher and Humana.
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