With ongoing uncertainties in the stock market, investors’ search for bulletproof stocks becomes paramount. Investors seek refuge in stable and growth-oriented stocks as the specter of economic downturns looms. The article lists three stalwarts of the U.S. stock market. Their strategic initiatives and unwavering focus on innovation have positioned them as beacons of stability in financial storms.
The article delves into the resilient strategies of these industry giants, how they weathered past recessions and why they are must-have assets for your investment portfolio.
Dollar General (DG)
Dollar General (NYSE:DG) may continue to drive value growth through a combination of strategic initiatives. It focuses on enhancing the customer experience, expanding its reach and strengthening its operational capabilities.
Dollar General is committed to improving its execution and customer service. By investing in its supply chain, the company has improved service levels, in-stock levels and on-time delivery rates from its distribution centers, contributing to the overall supply chain cost reduction. The company’s investment in additional retail labor has also positively impacted customer satisfaction and store standards.
Dollar General is also expanding its reach by opening new stores, remodeling existing ones and exploring opportunities in new markets. Additionally, the recent introduction of the “pOpshelf” format caters to non-consumable shopping occasions, providing a unique and differentiated shopping experience. Additionally, Dollar General is working to extend its reach into the digital realm, such as through its DoorDash (NYSE:DASH) partnership.
The company’s growth is also fueled by investing in critical components such as its supply chain, operating model, IT foundation, and employee satisfaction. Dollar General’s investment in distribution center automation and its private tractor fleet enhances efficiency and lowers costs. The rollout of self-checkout options and a retail operating model overhaul improved in-store experiences and operational efficiency. It recognizes the importance of its people as it offers growth opportunities and fosters a culture where employees feel valued. High internal placement rates and success stories of team members transitioning from stores to other organizational roles also drive employee satisfaction.
Walmart (WMT)
Walmart (NYSE:WMT) has gained market share in the U.S. grocery sector, with both units and dollars showing growth. This growth is partly attributed to Walmart’s focus on providing value to customers, offering competitive prices and maintaining a broad product assortment.
Walmart’s e-commerce sales have surged with a 24% increase. This was primarily driven by the success of its pickup and delivery services. The company’s investment in e-commerce infrastructure and its use of its vast network of physical stores for fulfillment has proven effective. Walmart’s digital initiatives are attracting more customers and driving growth.
Additionally, the company’s advertising business has experienced substantial growth, with a 35% increase. Walmart is effectively leveraging its vast customer data to offer targeted advertising solutions to businesses, attracting new advertisers and boosting returns on ad spend. This trend is expected to continue, driving higher-margin revenue.
Further, Walmart’s international segment has seen robust sales growth, particularly in markets like China, Mexico and India. The company is also expanding its marketplace internationally to allow third party sellers to offer their products on Walmart’s platform.
Also, Walmart’s investment in automation and supply chain improvements is bearing fruit. Automated regional distribution centers are achieving impressive efficiencies, and this technology rollout is expected to continue. Similarly, Walmart is diversifying into financial services with initiatives like PhonePe in India and Cashi in Mexico. These ventures are capitalizing on the growing trend of digital payments.
Johnson & Johnson (JNJ)
In Q2 2023, Johnson & Johnson (NYSE:JNJ) reported robust sales and earnings growth, with operational sales increasing and adjusted operational EPS growing. These results have led the company to raise its expectations for the year.
Johnson & Johnson is undergoing a strategic transformation, focusing on pharmaceuticals and MedTech while maintaining its position as the world’s largest healthcare products company. A commitment to science, innovation and technology drives this shift. The company’s diversified portfolio is a key strength, with 25 platforms generating over $1 billion in annual sales.
In the MedTech segment, the company achieved operational growth of 14.7% in the second quarter, driven by solid results across various regions. Recent innovations like the QDOT Ablation Catheter for Atrial Fibrillation demonstrated a clinical success rate of 86%. The integration of Abiomed is also progressing well, with sales reflecting approximately 20% growth.
The pharmaceutical division delivered above-market operational growth of 6.2% in the second quarter, excluding COvid-19 vaccine sales. Key products, including CARVYKTI, TECVAYLI and SPRAVATO, perform exceptionally well and may contribute significantly to the company’s 2025 sales target of $57 billion. Additionally, Johnson & Johnson received fast-track designation from the U.S. FDA for Milvexian, a Factor XI oral anticoagulant and submitted a supplemental BLA for CARVYKTI for a new indication.
The MedTech and pharmaceutical segments are poised for continued growth with innovations like the VELYS robotic-assisted solution, the QDOT Micro Catheter and regulatory approvals for various products. The company’s commitment to research and development and strategic investments support its long-term growth prospects.
Lastly, Johnson & Johnson is progressing toward separating its consumer health business, Kenvue. This strategic move will create shareholder value and enhance the company’s financial flexibility.
On the date of publication, Yiannis Zourmpanos did not hold (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.
