With Western and EU sanctions impacting the Russian economy in various ways, growing fears over the possible disruption in oil and gas supply from one of the world’s major exporters have pushed oil prices above $113/barrel today. However, ongoing efforts to revive the Iran nuclear deal, which would boost Iranian oil exports, ease tight global supplies, and restrict its ability to develop nuclear weapons, should significantly mitigate these concerns.
This, along with lingering concerns related to the Fed’s aggressive interest rate increases this year, is expected to keep the markets highly volatile in the near term. Therefore, investors should be judicious when picking stocks now. Since high-quality stocks can help dodge market uncertainty, investors are increasingly focusing on them. This is evident in the Invesco S&P 500 Quality ETF’s (SPHQ) 5.8% returns over the past nine months versus the SPDR S&P 500 Trust ETF’s (SPY) 4.1% returns.
Therefore, we think the stocks of Equinor ASA (EQNR), Hugo Boss AG (BOSSY), Alliance Resource Partners, L.P. (ARLP), and Westlake Chemical Partners LP (WLKP) could be ideal bets now. These companies’ profitability could help their stock weather the current market fluctuations and deliver stable returns.
Equinor ASA (EQNR)
EQNR is a Stavanger, Norway-based energy company that explores for, produces, transports, refines, and markets petroleum and petroleum-derived products and other forms of energy and other businesses internationally. The company develops oil, gas, wind, and solar energy projects and focuses on offshore operations and exploration services. In addition, it develops carbon capture and storage projects and other renewable energy.
On March 3, 2022, EQUR and BP plc (BP), a British multinational oil and gas company, agreed to transform the storied South Brooklyn Marine Terminal (SBMT) complex in Brooklyn into a world-class offshore wind port. The port will be capable of staging and assembling the largest, most sophisticated offshore wind technology components for the Empire Wind and Beacon Wind projects and the growing U.S. offshore industry on the East Coast. Also, this will help EQNR achieve its ambition to install 12-16 GW of renewable capacity by 2030.
For its fiscal year 2021 fourth quarter, ended December 31, 2021, EQNR’s net operating revenues came in at $13.58 billion, versus a $989 million loss in the prior-year period. The company’s adjusted earnings came in at $14.99 billion, representing a 1882.7% rise from the prior-year period. It had cash and cash equivalents of $14.13 billion as of Dec. 31, 2021.
Analysts expect EQNR’s EPS to improve 19.5% year-over-year to $3.69 for its fiscal year 2022, ending Dec. 31, 2022. The $111.80 billion consensus revenue estimate for the same fiscal year represents a 23% rise from the prior-year period. The company’s EPS is expected to grow at a 5.8% rate per annum over the next five years.
The stock has gained 68.3% in price over the past year and closed yesterday’s trading session at $32.51. EQNR’s trailing-12-month levered free cash flow margin, ROE, and ROA were 30.9%, 23.5%, and 15.2%, respectively.
EQNR’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
The stock has an A grade for Quality and Momentum and a B grade for Growth and Sentiment. Click here to see the additional ratings for EQNR’s Value and Stability.
EQNR is ranked #13 of 47 stocks in the A-rated Foreign Oil & Gas industry.
Hugo Boss AG (BOSSY)
Based in Metzingen, Germany, BOSSY develops, markets, and distributes clothes, shoes, and accessories worldwide for men, women, and children. The company also offers licensed products, including fragrances, eyewear, and watches. It markets and sells its products under the BOSS and HUGO brand names through online stores, shop-in-shops, and factory outlets with approximately 7,350 sales points.
To promote sustainability within the fashion industry, BOSSY entered a long-term, strategic partnership with HeiQ AeoniQ LLC, a subsidiary of HeiQ Plc, a U.K.-based environmentally conscious materials and textile innovation company, on Feb. 14, 2022. HeiQ AeoniQ is a continuous cellulosic filament yarn that constitutes a revolutionary and scalable proprietary apparel technology, allowing the production of a sustainable and closed-loop recyclable cellulosic yarn to substitute oil-based fibers. This investment also substantially contributes to BOSSY’s goal of climate neutrality by 2030 and throughout the entire value chain by 2045.
For its fiscal year 2021 third quarter, ended Sept. 30, 2021, BOSSY’s sales increased 6.4% year-over-year to €755 million ($831.27 million). The company’s gross profit came in at $466 million, representing a 41.2% year-over-year improvement. Its EBIT came in at €85 million ($93.59 million) for the quarter, representing a 466.7% increase from its year-ago period. BOSSY’s net income increased 1700% year-over-year to €54 million ($59.46 million). Its EPS came in at €0.76, up 1166.7% from the prior-year period. And as of Sept. 30, 2021, the company had €113 million ($124.42 million) in cash and cash equivalents.
BOSSY surpassed the consensus EPS estimates in three of the trailing four quarters. Analysts expect the company’s revenue to hit $3.49 billion for its fiscal year 2022, ending Dec. 31, 2022, representing a 13.1% increase from the prior-year period.
BOSSY’s shares have gained 41.7% in price over the past year and ended the last trading session at $11.11. Its trailing-12-month levered free cash flow margin, ROE, and ROA were 13.2%, 6.3%, and 3.1%, respectively.
BOSSY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system.
It has an A grade for Growth and Quality and a B grade for Value. Click here to see the additional ratings for BOSSY (Momentum, Stability, and Sentiment).
BOSSY is ranked #4 of 66 stocks in the A-rated Fashion & Luxury industry.
Alliance Resource Partners, L.P. (ARLP)
ARLP is a diversified natural resource company that produces and markets coal primarily to utilities and industrial users in the United States. The Tulsa, Okla.-based company also offers various industrial and mining technology products and services, such as miner and equipment tracking systems and proximity detection systems. It produces coal from seven mining complexes. Its subsidiaries operate in Illinois, Indiana, Kentucky, Maryland, and West Virginia.
For its fiscal year 2021 fourth quarter, ended Dec. 31, 2021, ARLP’s total revenues increased 29.2% year-over-year to $473.47 million. The company’s income from operations came in at $61.14 million, representing a 34.1% rise from the prior-year period. While its adjusted net income increased 48% year-over-year to $5183 million, its EPS grew 48.2% to $0.40. As of Dec. 31, 2021, the company had $122.40 million in cash and cash equivalents.
The $2.76 consensus EPS estimate for its fiscal year 2022, ending December 31, 2022, represents a 90.3% rise from the prior-year period. Analysts expect the company’s revenue to hit $2.01 billion in the same fiscal year, up 28.2% from the year-ago period.
The stock has gained 148.9% in price over the past year to close yesterday’s trading session at $14.91. ARLP’s trailing-12-month levered free cash flow margin, ROE, and ROA were 13.9%, 15.6%, and 6.1%, respectively.
ARLP’s POWR Ratings reflect its solid prospects. It has an overall A rating, which equates to Strong Buy in our proprietary rating system.
The stock has an A grade for Momentum and Quality and a B grade for Sentiment and Value. In addition to the POWR Ratings grades we have just highlighted, one can see the ratings for ARLP’s Growth and Stability here.
ARLP is ranked #2 of 10 stocks in the A-rated MLPs - Other industry.
Westlake Chemical Partners LP (WLKP)
WLKP in Houston, Tex., acquires, develops, and operates ethylene production facilities and related assets that primarily convert ethane into ethylene. The company also sells ethylene co-products, including propylene, crude butadiene, pyrolysis gasoline, and hydrogen directly to third parties on a spot or contract basis.
For its fiscal year 2021 fourth quarter, ended Dec. 31, 2021, WLKP’s total net sales increased 34.5% year-over-year to $330.46 million. The company’s gross profit came in at $147.05 million, indicating a 73.2% rise from the prior-year period. Its income from operations was $140.77 million, up 81.4% from the prior-year period. While its net income increased 96.4% year-over-year to $29.51 million, its EPS increased 95.4% to $0.84. As of Dec. 31, 2021, the company had $17.06 million in cash and cash equivalents.
Analysts expect the company’s revenue to hit $1.22 billion for its fiscal year 2022, ending Dec. 31, 2022, representing a marginal improvement from the year-ago period. It surpassed the Street’s EPS estimates in each of the trailing four quarters. The company’s EPS is expected to grow at a 6.4% rate per annum over the next five years.
The stock has gained 11.6% in price over the past year and ended yesterday's trading session at $26.17. WLKP’s trailing-12-month levered free cash flow margin, ROE, and ROA were 27.1%, 42.5%, and 18.1%, respectively.
WLKP’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system.
It has an A grade for Quality and a B grade for Value, Sentiment, and Stability. Click here to see the additional ratings for WLKP (Growth and Momentum).
WLKP is ranked #1 in the A-rated MLPs - Other industry.
EQNR shares were trading at $33.47 per share on Friday afternoon, up $0.96 (+2.95%). Year-to-date, EQNR has gained 27.66%, versus a -9.37% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
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