Phil Rogers

July Pick: Aviva (LSE:AV)

Aviva is a well-known savings and insurance company. It has operations worldwide, but has been streamlining over the past year or so via selling off some business lines to focus on the UK, Ireland and Canada markets.

The more nimble Aviva going forward is one that we think is in a good position to weather a potential recession, both here in the UK and as part of a broader global economic slowdown. The company operates a resilient business model with strong cash flow generation. It also has inelastic demand for the products and services. After all, who isn’t going to continue to contribute to a pension or insurance even during a downturn?

Even if the share price takes a hit due to a market crash, we also like Aviva shares for the dividend. The yield currently sits at 5.31%, well above the FTSE 100 average. To be able to pick up income over this period allows reinvestment to further grow our pot. Finally, even though the dividend yield won’t perfectly offset erosion from inflation, it does go a lot further than leaving our funds sat in cash.

Jesse Williamson

July Pick: NextEra Energy (NYSE:NEE)

The stock market is in conflict due to rising bond yields. Utility stock prices have increased and it appears that trend will continue. The Utilities Select Sector SPDR exchange-traded fund (XLU) is up 6.3% this year.

The company not only owns Florida’s biggest electric utility, but it also produces more electricity from solar and wind energy than any other company in the globe. Given its businesses, NEE is in a fantastic position to profit from the electric vehicle and renewable energy revolutions.

NextEra Energy will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.75, up 5.63% from the prior-year quarter, and revenue of $5.32B.

Robert Henrik

July Pick: Walmart (NYSE:WMT)

When the economy is in trouble, the Consumer Staples sector often outperforms, as consumers reign in their discretionary spending and focus on the essentials. Walmart is one of the largest retailers in the US and should benefit from a more difficult macro-economic environment. WMT is down 15% year-to-date, which has been a resilient performance in comparison to other large cap US stocks and the wider equity markets. We believe this relative outperformance will continue.

Analyst Recommendations – WMT has strong support from the institutional crowd, as the latest Bloomberg survey of Equity Research Analysts showed that 81% have issued a “BUY” rating and 19% have a “HOLD” rating on the stock. In the last year, none of the surveyed analysts have issued a “SELL” recommendation. The 12 month consensus target price of ~$150 implies a return potential of 25% based on the current stock price.

Financials – Q1 revenues hit ~$142 billion, up a few % year-on-year, and Net income was ~$2 billion. The company also has a long history of paying stable dividends, with a current Dividend Yield of ~2%.

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