• Discounts and special offers
  • Subscriber-only articles and interviews
  • Breaking news and trending topics

Already a subscriber?

By signing up, you accept Moneywise's Terms of Use, Subscription Agreement, and Privacy Policy.

Not interested ?

Nike (NKE)

Sports apparel and footwear giant Nike has been a popular stock for investors. Over the past five years, shares have climbed more than 140%.

Management is also returning cash to investors. In the most recent quarter, Nike paid out $484 million in dividends to shareholders — up 12% from the prior-year period.

Those dividends are backed by a profitable business. For the quarter, Nike earned a profit of $1.4 billion. Meanwhile, its revenue grew 5% year over year to $10.9 billion.

Morgan analyst Kimberly Greenberger is confident in Nike’s ability to deliver strong earnings despite rising wages in the U.S.

“We expect Global Brands to be relatively insulated from wage inflation given lower store counts and high revenue penetration in the wholesale & eComm channels,” she writes. “Additionally, revenue exposure to international geographies could help alleviate pressures from US wage inflation.”

Greenberger has a price target of $192 on Nike — about 44% above where the stock sits today.

Meet Your Retirement Goals Effortlessly

The road to retirement may seem long, but with WiserAdvisor, you can find a trusted partner to guide you every step of the way

WiserAdvisor matches you with vetted financial advisors that offer personalized advice to help you to make the right choices, invest wisely, and secure the retirement you've always dreamed of. Start planning early, and get your retirement mapped out today.

Get Started

Knight-Swift Transportation Holdings (KNX)

Knight-Swift is in the freight transportation business, providing multiple truckload transportation and logistics services throughout North America.

Having Knight-Swift on this list may seem counterintuitive because pay raises have been common in the transportation industry amid the driver shortage. But Morgan analyst Ravi Shanker sees the company coming out just fine.

“While TL driver wages have seen some of the sharpest increases over the last two years, KNX's relatively low exposure to wage-driven costs as a % of revenues and remarkable pricing power (evidenced by EBIT growth 2x the group average) should position them well to navigate wage inflation,” he says.

“We believe scale and exposure can make them the biggest beneficiary of any additional upside from the cycle.”

Knight-Swift is already delivering rapid growth in this cycle. In Q4 of 2021, consolidated revenue rose 38.8% year over year while consolidated operating income shot up 76%.

The company hasn’t been an investor favorite lately as shares are down about 25% year to date. But Shanker sees a rebound on the horizon. His price target of $85 implies a potential upside of 86%.

Rockwell Automation (ROK)

More and more companies are choosing to automate their processes in the face of rising labor costs. And that means a significant tailwind for Rockwell Automation — a global leader in industrial automation and digital transformation.

“We view Rockwell as a prime beneficiary of secular investments driven by a multitude of catalysts converging (supply chain constraints, labor shortages, near-shoring) as technology is improving and paybacks are shortening,” writes analyst Josh Pokrzywinski.

He adds that because Rockwell can also increase automation in its own factories, the stock is “fairly insulated from higher wages.”

Rockwell shares are down 20% in 2021. But the company recently achieved record quarterly orders of $2.5 billion, a year-over-year increase of more than 40%.

Rockwell’s improvement should give contrarian investors something to think about. Pokrzywinski has a price target of $395 on Rockwell shares — 42% higher than the current levels.

This 2 Minute Move Could Knock $500/Year off Your Car Insurance in 2024

Saving money on car insurance with BestMoney is a simple way to reduce your expenses. You’ll often get the same, or even better, insurance for less than what you’re paying right now.

There’s no reason not to at least try this free service. Check out BestMoney today, and take a turn in the right direction.

Get Started

More from Moneywise

Sponsored

Follow These Steps if you Want to Retire Early

Secure your financial future with a tailored plan to maximize investments, navigate taxes, and retire comfortably.

Zoe Financial is an online platform that can match you with a network of vetted fiduciary advisors who are evaluated based on their credentials, education, experience, and pricing. The best part? - there is no fee to find an advisor.

About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.

What to Read Next

Disclaimer

The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.