This top grocer does virtually all its business in the United States. Kroger Co. (NYSE: KR) is the second-largest U.S. food supermarket retailer and generates $120 billion in annual sales. Kroger operates roughly 2,800 supermarkets throughout 35 states and under two dozen banners. Kroger also sells fuel at 1,450 supermarket fuel centers and operates 2,268 pharmacies and 274 jewelry stores.
Analysts note that the company’s price leadership, strong management team, store execution and impressive leveraging of technology partnerships and investments (including a recently announced partnership with Ocado) should support Kroger’s revenue outlook and help drive efficiency.
Shareholders receive a 2.16% dividend. The $31 Merrill Lynch price target is above the posted $27.95 consensus target. Kroger stock closed most recently at $28.75.
This is another stock with solid upside potential and a degree of safety.
Eli Lilly and Co. (NYSE: LLY) is a global health care company with numerous core products in a number of primary-care pharmaceutical markets. The company generates revenues from its pharmaceutical product and animal health segments.
The product portfolio includes Zyprexa (for schizophrenia and bipolar disorder), Gemzar (pancreatic cancer), Evista (osteoporosis), Cymbalta (depression), Cialis (erectile dysfunction), Strattera (attention deficit hyperactivity disorder), Erbitux (cancer) and Alimta (chemotherapy). Eli Lilly also has a strong presence in the diabetes market.
Eli Lilly results came in strong for the fourth quarter, and Merrill Lynch analysts said this when it reported:
With a strong close to 2019, Lilly’s industry-leading top- and bottom-line growth appears on track to continue in 2020. 2020 is shaping up to be a big year of clinical and regulatory catalysts across all of Lilly’s core franchises. Discontinuation of pegilodecakin, while a disappointment for Lilly’s oncology franchise, was already removed from our model.
The dividend yield here is 2.19%. Merrill Lynch has a $155 price objective. The consensus target is $145.08, and Eli Lilly stock was last seen trading at $133.53 per share.
This Houston-based company is the clear solid waste industry leader. Waste Management Inc. (NYSE: WM) is the largest non-hazardous waste operator, servicing 21 million residential, commercial, industrial and municipal customers across 48 states and Canada.
Waste Management is vertically integrated, owning nearly 400 collection operations, 249 active solid waste landfills, 297 transfer stations and 104 recycling centers. The company has significant economies of scale, with 66% of the waste it collects disposed of at its own landfill. It also is a leading developer, operator and owner of landfill gas-to-energy facilities in the United States.
Shareholders receive a 1.79% dividend. RBC recently raised its $125 price target to $138, which is above the consensus estimate of $130.27. Waste Management stock ended Wednesday’s trading at $120.93 a share.
Even in a worst-case scenario, people across the country will still need phone service, entertainment, electricity, groceries and gasoline, medicine and garbage removal. While none of that sounds super exciting, with the potential for continued elevated volatility, it’s a smart bet now.
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