We have pointed out for months here at 24/7 Wall St. that the market was very overbought. We also have advised readers that we have only had just one 5% market correction since the fall of 2020. Toss in the fact that inflation is rearing its ugly head, and we could be in for the kind of serious sell-off that last hit the equity markets as recently as 2020.
Since the lows in March of 2020, the stock market has more than doubled. Think about that for a moment. The S&P 500 closed at 2,237 on March 23 of that year and closed on January 3, 2022, at 4,793, an incredible 115%+ gain in 22 months. Numerous reasons for the massive gains have been cited, including the incredibly loose monetary policy that has been in place for years but went nuclear when COVID-19 showed up in the winter of 2020. Toss in the Reddit/WallStreetBets retail army crowd, which had government hand-outs initially to trade with while locked at home, and you had all the ingredients for the proverbial melt-up.
The bottom line is that the Federal Reserve liquidity punchbowl is going away soon. After years of avoiding raising interest rates, the Fed has painted itself into a deep corner, and the spiraling inflation needs to be dealt with now. Most on Wall Street now expect to see four interest rate hikes this year, beginning in March.
We screened the BofA Securities research universe looking for companies that paid solid and dependable dividends, were Buy rated and also had the firm’s best volatility risk rating. Remember that no single analyst call should ever be used as a basis to buy or sell a stock.
Coca-Cola
This remains a top Warren Buffet holding and offers not only safety but also an incredibly strong worldwide brand with 40% overseas sales. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands.
Led by Coca-Cola, one of the world’s most valuable brands, the company’s portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks.
Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy Coca-Cola beverages at a rate of more than 1.9 billion servings a day. Also remember that the company also owns 16.7% of Monster Beverage, which continues to deliver big numbers.
Investors receive a 2.78% dividend. The BofA Securities price target for Coca-Cola stock is $64, while the consensus target is $63.72. The shares closed on Friday trading at $60.45.
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