Investing in a bear market can be scary -- but investors ought to understand that the stock market experiences highs and lows. Even excellent businesses see their stock price tumble at some point. History has shown that bear markets create good entry points to buy excellent growth stocks.
Putting your money in a diversified set of stocks belonging to different industries can bring in good returns. Consumer company Hormel Foods (HRL 0.94%), healthcare retailer Walgreens Boots Alliance (WBA -0.86%), and rising cannabis star Green Thumb Industries (GTBIF 0.65%) are three supercharged stocks that may be excellent choices to buy and hold for the long run.
1. Hormel Foods
While it's a growth stock, another perk of investing in packaged-foods company Hormel Foods is earning passive income. It's earned the title of "Dividend King," meaning a company that's increased its dividends for at least 50 consecutive years. Hormel has increased its dividend annually for 56 years, assuring investors of how stable its business is. It offers a current dividend yield of 2.1%, higher than the S&P 500's average of 1.8%.
Its iconic brands (such as Spam, Planters, Wholly, Jennie-O, and Dinty Moore) have going supporting the consistent dividend payouts. Investors might worry about the effects of inflation on the company, but that's a short-term headwind that won't dent its long-term growth. The company recorded net sales of $3.1 billion in the second quarter, a jump of 19% from the prior-year quarter. Operating income was up 16%, and earnings per share rose 14% year over year. However, volume was down by 2%; that might worry investors, but I believe it's a temporary setback.
Hormel's management is confident about tackling short-term inflationary pressures, and reaffirmed its sales guidance of $11.7 to $12.5 billion for the full year. The company also foresees a strong finish to the year driven by its refrigerated-foods business.
2. Walgreens Boots Alliance
Another great income and growth stock is pharmaceutical retailer Walgreens Boots Alliance, which currently offers a dividend yield of 5.1%. Its long history of dividend growth proves that the company itself is stable even during turbulent times.
The company had a weak quarter pressured by inflation and supply disruptions, but management is confident it will end the year on a strong note. Its adjusted net earnings from continuing operations dipped 30% year over year to $834 million in the fiscal third quarter, while sales declined 4.2% to $33 billion.
No matter the condition of the economy, medicines and healthcare products will always remain in demand, driving revenue for healthcare companies. Last year, Walgreens increased its dividend by 2.1% to 47.75 cents per share. This marked its 46th dividend increase, making Walgreens a Dividend Aristocrat (a company that has paid and increased dividends for at least 25 consecutive years). Average Street analysts have a hold rating on Walgreens stock.
3. Green Thumb Industries
Illinois-based cannabis multi-state operator (MSO) Green Thumb Industries has come into the limelight with its aggressive expansion strategies. While cannabis is still illegal at the federal level, numerous state markets allow it. Even in a limited legal market, this MSO has seen its revenue quadruple from $216 million in 2019 to $894 million in 2021.
From operating 39 stores in 2019 to around 80 dispensaries in 15 states today, Green Thumb has come a long way. Probably this growth has helped the company to be profitable for seven consecutive quarters, while its Canadian counterparts are still struggling to see green in their bottom line.
This MSO targets limited-license markets -- states that offer licenses to select cannabis operators. This strategy of targeting key markets has worked very well: Its revenue in Q1 jumped 25% year over year to $243 million.
Net income under generally accepted accounting principles (GAAP) was $29 million, rising from $10 million in the year-ago period. Q1 marked its ninth consecutive quarter of positive cash flow from operations, which came in at $55 million. The company also ended the quarter with $175 million in cash; cash on hand will help Green Thumb repay its debt and fund further expansion this year. So far this year, the cannabis operator has opened 10 stores. We will know more about this when it releases its second-quarter results on Aug. 3.
Average Street analysts have a strong buy rating for Green Thumb stock. With the marijuana industry expanding rapidly, this pot stock is now a bargain buy for growth investors.