Posted in
Education
By: Tom Gentile
on February 15th, 2023
Last year’s performance for the stock market was bearish and that’s an understatement really.
The bear market has gone longer than the average length of a bear market, which is 9.6 months.
Here are a couple of what I deem primary concerns the markets, the economy, WE faced in 2022.
We had and still have the probability of an economic recession.
The Fed raised rates at an accelerated pace in 2022 and they don’t appear to be stopping any time soon in 2023.
The reason the Fed is continuing to raise rates is they are trying to stave off inflation that reached its highest peak in the past 40, yes 4 decades in 2022.
In research done for this bear market I’ve read that the bear market in the S&P 500 started January 3 of last year. June 13 is when it dropped 20% and that is when it was deemed a bear market.
This means this bear market lasted or longer than the average bear market.
Are we completely out of a bear market. It still may be too early to tell. Some feel this recent run up in the market to start 2023 is just another bull trap. It seems to some to be a bear market rally.
Should this end up being a bear market rally and another rollover is due to come the markets way I still see stocks that are outperforming the markets.
I still see stocks that are paying out healthy annual dividends. And healthy to me is over 3% annual dividends. I also see stocks that are maintaining price levels at 50% or more of their 52-week highs, showing to me they have staying power and are holding up versus the bearish back drop of the markets.
You Can’t Time The Markets
Or it’s quite the challenge to be able to do so and people lose a lot of money trying to do so.
That is not the intention of this report.
I am looking at a handful of stocks that I believe will perform with continued growth, staying power – meaning they will maintain a price level in the higher-than-average percentage range to their 52-week high and their dividends will continue to provide consistent, ongoing income to their investors.
This consistent dividend income a way to say these stocks will provide unlimited profit potential. I hesitate to say that with certainty as nothing is 100% and we can’t really predict the future.
If past history can be used as a gauge though, these stocks have the good chance to provide profit potential for year to come.
5 Stocks That Have Good Profit Potential
Here are 5 stocks that represent the characteristics I just wrote about, and I feel have good, profit potential for a long time coming. The chart time frame shown in all of these is the first day of trade 2022 to present date this report was constructed.
1) ONEOK, Inc. (NYSE: OKE)
This is an Energy stock, specific to the Oil & Gas Midstream Industry.
We are at the cusp of the seasonally bullish pattern for energy and oil, so I do like this, but more than that it has a consistent track record of paying out a nice dividend.
Per my software Toms Option Tools, (www.tomsoptiontools.com) the Forward Dividend Yield (%) is 5.48%.
The Forward Dividend Yield is an estimation of the yearly dividend yield based on annualizing the most recent dividend amount and expressing that as a percentage of the current stock price.
It’s had an increase in its dividend the past two year running.
It is trading at 82.86% of its 52-week high as of February 2023.
2) The Clorox Company (NYSE: CLX)
This Consumer Defensive Stock specializes in Household Goods and Personal Products.
They are trading at 87% of their 52-week high and though it has traded in a choppy sideways range for much of 2022, they still consistently pay a dividend.
They pay out a dividend each quarter.
One other dividend statistic my software tracks is Past Yearly Dividend Increase – The number of consecutive years of annual dividend payment increase ending before the start of the current year.
CLX shows 4 consecutive years of Past Dividend Yearly Increase, and the current Forward Dividend Yield is 3.07%.
3) Pinnacle West Capital Corporation (NYSE: PNW)
PNW is a stock whose sector is Utilities. The company provides retail and wholesale electric services primarily in the state of Arizona. Let’s look at the measurables I am using for stock selection for this report. They are at 71.83% pf their 52-week high. They are consistent with their dividend in that their Past Yearly Dividend Increase track record is 4 years running. Their current Forward Dividend Yield % is 4.63%.
4) AT&T Inc. (NYSE: T)
This telecommunication services stock/company has been around awhile.
T is not quite the growth stock it once was, but the reasons it is on this list is the consistent history of dividend payouts and its Forward Dividend Yield % is the second highest of the five shown, currently at 5.78%.
They have a 2-year in a row Past Yearly Dividend Increase.
It would be nice to highlight pure growth stocks, stocks that is deemed having a chance at gaining investor profits via capital appreciation.
They tend to be newer companies and or those in technology and biotech. They tend to have negative earnings and high P/E and that is not AT&T. We are not looking at T to be that type of stock, but rather be a reliable income producer through dividends for as long as it exists.
They are at 69% of their 52-week high.
5) Diamondback Energy, Inc. (NASDAQ: FANG)
This is the only stock in my five listed on the NASDAQ exchange and no, just because the ticker symbol is FANG, it is not the commonly known and referred to acronym for the top technology stocks,
This is an Energy stock specific to Oil & Gas E&P (Exploration and Production).
They are showing up at 64.54% of their 52-week high.
Their Past Yearly Dividend Increase track record is 4: 4 years of increasing dividends.
Their current Dividend Yield % is 6.21%, the highest paying dividend of the group.
Wrap Up
We started with an energy stock and bookend the list with another.
I’ve highlighted 5 stocks I feel qualify for the category of consistent profitability, maybe not for life, but for a significantly long time to come.
Not only do I see long-time profit potential out of these stocks I have shown you a diversified grouping. They are not ALL from one sector. This group is more diversified than that.
What is shown is 2 Energy stocks, a Telecom Communications stock, a Utility, and a Consumer Defensive stock.
As always consult with your broker/ financial professional(s) as to the suitability to your portfolio before making any investment or trading decisions.
App: Toms Option Tools
Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.
Other times I will have other charts may work to amplify my educational points.
Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.
Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.
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