HomeMost PopularInvesting5 Blue-Chip Stocks to Buy Ahead of Fed's FOMC Meeting Outcome

5 Blue-Chip Stocks to Buy Ahead of Fed’s FOMC Meeting Outcome

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Investors worldwide are eagerly awaiting the announcement of the outcome of the Fedโ€™s September FOMC meeting, scheduled for today at 2 PM EST. Analysts predict that the central bank is likely to maintain the current Fed fund rate range of 5.25-5.5%, with a probability of 98%. Market participants are also speculating about the possibility of an interest rate hike in the November FOMC meeting, with a 28% chance according to CME FedWatch.

Although there have been positive indicators, concerns about the Fedโ€™s future actions have led to increased volatility in the market since early August. Traders and investors are anxiously looking to Fed Chair Jerome Powellโ€™s post-FOMC statement for insights into the central bankโ€™s monetary policies going forward.

Given the current scenario, it would be wise to consider investing in blue-chip stocks, specifically those that are part of the Dow 30 index and have a favorable Zacks Rank. These companies are known for their strong business models, solid financial positions, and renowned brand value. Additionally, they pay regular dividends, which can provide a steady income stream during market downturns.

Our Top Recommendations

We have curated a list of five blue-chip stocks that we believe have significant potential for the remainder of 2023. These stocks have seen positive revisions in earnings estimates in the last 60 days and have a Zacks Rank of either #1 (Strong Buy) or 2 (Buy). For the complete list of todayโ€™s top-ranked Zacks stocks, click here.

Letโ€™s take a closer look at the performance of these five picks over the past three months:

Zacks Investment Research
Image Source: Zacks Investment Research

Caterpillar Inc. (CAT)

Caterpillar Inc. (CAT) has experienced year-over-year revenue and earnings growth for nine consecutive quarters due to its cost-saving measures, strong end-market demand, and successful pricing actions. We anticipate a 19.5% growth in adjusted earnings per share for 2023, along with a 7.6% increase in revenues.

CAT, currently ranked #1 by Zacks, is expected to achieve a revenue growth rate of 11.9% and an earnings growth rate of 43.2% for the current year. The Zacks Consensus Estimate for earnings has improved by 0.2% in the last 30 days, and the stock currently offers a dividend yield of 1.85%.

International Business Machines Corp. (IBM)

International Business Machines Corp. (IBM) is experiencing sales growth in its software segment, driven by strong adoption of hybrid cloud solutions and increased demand for RedHat, automation, AI data, and security. IBMโ€™s research capabilities, broad portfolio, and global market presence set it apart from competitors.

IBM stands to benefit from its Watson platform, and the acquisition of Apptio is expected to enhance IBMโ€™s IT automation capabilities. As a #2 ranked stock by Zacks, IBM is projected to achieve a revenue growth rate of 1.6% and an earnings growth rate of 3.3% for the current year. The Zacks Consensus Estimate for earnings has improved by 0.2% in the last 30 days, and the stock currently offers a dividend yield of 4.58%.

McDonaldโ€™s Corp. (MCD)

McDonaldโ€™s Corp. (MCD) continues to impress investors with robust comparable sales growth. The companyโ€™s focus on menu innovation and expanding its loyalty program has been commendable, and it is actively working towards driving growth in international markets. Additionally, McDonaldโ€™s digitalization efforts are expected to boost long-term growth and market share. MCD plans to open more than 1,900 restaurants globally in 2023.

As a #2 ranked stock by Zacks, McDonaldโ€™s is projected to achieve a revenue growth rate of 9.8% and an earnings growth rate of 14.1% for the current year. The Zacks Consensus Estimate for earnings has improved by 0.3% in the last 30 days, and the stock currently offers a dividend yield of 2.19%.

Walmart Inc. (WMT)

Walmart Inc. (WMT) has been benefiting from its strong omnichannel operations, with a focus on enhancing the in-store and online customer experience. The companyโ€™s efforts to improve delivery services, along with increased market share in the grocery sector, have contributed to continued growth. Walmart also raised its guidance for fiscal 2024, reflecting its positive outlook.

As a #2 ranked stock by Zacks, Walmart is projected to achieve a revenue growth rate of 9.2% and an earnings growth rate of 2.2% for the current fiscal year. The Zacks Consensus Estimate for earnings has improved by 0.2% in the last 30 days, and the stock currently offers a dividend yield of 1.40%.

The Procter & Gamble Co. (PG)

The Procter & Gamble Co. (PG) has shown robust pricing power and a favorable product mix, driving sales growth across segments. Its products cater to the daily health, hygiene, and cleaning needs of consumers worldwide. PG has implemented cost-saving measures and efficiency improvements across its business, resulting in improved margins.

As a #2 ranked stock by Zacks, Procter & Gamble is projected to achieve an earnings growth rate of 4.4% and 8.1%, respectively, for the current fiscal year. The Zacks Consensus Estimate for earnings has improved by 0.9% in the last 60 days, and the stock currently offers a dividend yield of 2.44%.

For the latest recommendations and insights from Zacks Investment Research, you can download 7 Best Stocks for the Next 30 Days here.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Nasdaq, Inc.

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