Down Market, Good Stocks, Southern Company, PepsiCo, Caterpillar

Kate’s guest this week is Brian Mulberry, client portfolio manager at Zacks Investment Management. Brian brings three large-cap ideas today and discusses why one utility may have potential beyond the traditional role of a dividend payer. Stick around until the end, because Brian shares how to access Zacks research to get more ideas.

-Why Brian’s utility pick, Southern Company, has earnings durability that causes him to think it can withstand the higher cost of capital as interest rates rise -The company has strong earnings growth, relative to the S&P 500 and may be able to pass along higher costs to its customers -Brian attributes the company’s recent blowout quarterly report to investments that the company has made over the years -Should investors be looking to utilities for a return beyond dividend yield? -Brian’s second stock, PepsiCo, also has earnings durability -How the company’s growth through acquisition has allowed it to have pricing power, by focusing on strong brand names -How Pepsi’s focus on Gatorade and its distribution deal with Celsius is helping the company expand its presence and loyalty in the youth market -Why Brian sees Pepsi’s distribution strategy as an edge in the supply chain where other manufacturers have fallen short -Brian’s third stock is an old-school industrial, Caterpillar, which has also navigated supply chains well -Why Brian sees Caterpillar as large earnings per share grower, based on increased infrastructure spending and the Inflation Reduction Act. -Why he sees this stock as attractive, although it’s not one he expects to behave like a red-hot growth stock

Stocks mentioned in this episode

Southern Company (SO) PepsiCo (PEP) Caterpillar (CAT)

How to learn more about Zacks Investment Management

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