In August, the US Bureau of Labor Statistics reported United States job and wage growth slowing while unemployment was growing. This is a signal that the Federal Reserve’s plan to reduce inflation and avert a recession appears to be working. The U.S. alone added 187,000 jobs over the last month, and hourly earnings rose 4.3% above wage growth at this time last year. The steady job growth and subsequent rise in hourly earnings suggests more disposable income for consumers. This could boost corporate earnings and revenue for companies, as well as lead to favorable economic conditions. These three corporally sustainable and technologically advanced stock picks for this week have investors feeling optimistic.
Realty Income Corp (O)
Realty Income Corp (NYSE:O) is a real estate company that generates monthly cash dividends from a diverse portfolio of commercial properties. Realty Income’s status as a Dividend Aristocrat also makes it a highly compelling buy.
The median 12-month price target from analysts on Realty Income stock is $68.00, with low and high price targets of $61.00 and $74.00. Furthermore, data from Yahoo! Finance reports 31 analysts rated O stock as a “buy” since June 2023 alone.
Financials are strong for this company. Revenue in 2022 ended at $3.34 billion, which is a 60.32% YoY increase, with stable rent payments despite Covid-19 closures. On March 14, Realty Income increased its monthly cash dividends from $0.2545 to $0.2550 per share, marking the 120th dividend increase since 1994. As of September 1, O stock has an annual dividend yield of 5.46% which is perfect for income-seeking investors.
In Q2 2023, Realty Income closed a deal with the retail company EG Group, on a sale-leaseback program (the sale of assets followed by a long-term lease), worth up to $1.5 billion, where it acquired 415 single-tenant convenience stores. The portfolio acquired from this deal includes retail companies such as Cumberland Farms, Tom Thumb, and Sprint stores. Realty Income now has over 13,000 commercial properties, setting this company up for long-term growth in this acquisition.
Thanks to its impressive global portfolio of real estate and steady financials, this dividend machine is poised for long-term growth.
UnitedHealth Group Incorporated (UNH)
UnitedHealth Group Inc (NYSE:UNH) is the largest healthcare company and the world’s 11th-largest company by revenue. It also provides products through its subsidiary healthcare services provider, Optum.
UNH stock is down 8.18% YTD. UnitedHealth ended with record revenue of $91.9 billion in the first quarter, growing 15% YoY and beating analyst expectations. EPS is $22.34, and a FCF yield of 17.67% sets UnitedHealth Group for a steady and profitable future.
UnitedHealth Group is the largest healthcare company, controlling 12% of the industry. In June of this year, the home health company Amedisys (NASDAQ:AMED) agreed to merge with UnitedHealth Group. The $3.3 billion merger will leave Amedisys under the Optum branch. This deal was pursued as UnitedHealth and Optum had been seeing significant growth in the home health sector. Moreover, the acquisition will assist the company in controlling more parts of the healthcare industry. In late July, UnitedHealth announced that it will be donating over $11.1 million to non-profits across 12 states. These donations are planned to support the work of local organizations and provide better services in the states.
Yahoo! Finance reports 22 analysts rated UNH stock a “buy” or “strong buy”. The 1-year price target mean is $573.46, and these analysts range from a low to high price of $520.00 to $650.00. With the dominance of UnitedHealth Group, UNH stock is a strong long-term stock to add to your portfolios.
Paycom Software Inc (PAYC)
Paycom Software Inc (NYSE:PAYC) offers cloud-based human resources technology services, online payroll solutions and software-as-a-service (SaaS) applications.
Despite PAYC stock being down by a mere -2.90% YTD, financials have remained steady and strong. In particular for quarterly earnings in June, revenue of $401.14 million grew 26.57% which beat analyst expectations by 0.72%. Diluted EPS of $1.11 also grew 12.12%, and EPS itself beat analyst forecasts by 1.34%. Lastly, a high $64.52 million that grew 12.49% cements that Paycom is adequately well funded for long-term expenses.
Paycom has donated nearly $300,000 and awarded grants to four local public school foundations to offer opportunities to over 17,000 students and families. The community engagement for Paycom allows the company to grow by having an increasingly growing consumer base. Additionally, it assists the company in retaining customers for its global HR software. This software was valued at $17,430.00 million in 2021 and will grow at a 10.86% CAGR to $32,356.00 million by 2027.
Yahoo! Finance reports 19 analysts having a median 1-year price target of $389.43, with the stock price ranging from as low as $325.00 to a high of $450.00. These are all upsides in PAYC stock, and it is your time to consider this sustainable yet dominant stock to be in your portfolio.
On the date of publication, Michael Que did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
