Last month, the Federal Reserve raised the benchmark interest rates by 75 basis points for the second consecutive month to tame the multi-decade high inflation. The U.S. economy contracted 0.9% in the second quarter, making many analysts believe that a recession has already arrived.

Despite the uncertain macroeconomic conditions, inflation-adjusted consumer spending continued to rise. This, along with robust employment data, might encourage the Fed to consider more significant interest rate hikes, eliminating the possibility of the economy’s soft landing.

During such uncertain macroeconomic conditions, investing in winning stocks could help generate significant returns. As investors prepare for a busy week of inflation data, adding fundamentally sound, winning stocks Murphy USA Inc. (MUSA) and JAKKS Pacific, Inc. (JAKK) to your watchlist could be wise.

Murphy USA Inc. (MUSA)

MUSA is engaged in marketing retail motor fuel products and merchandise through a chain of retail stores. The company operates retail stores under three brands: Murphy USA, Murphy Express, and QuickChek. It has 1,679 retail stores in approximately 27 states, primarily in the Southeast, Southwest, and Midwest United States.

On May 5, MUSA’s Board of Directors declared an increase of 7% in the company’s quarterly cash dividend to $0.31 per share of common stock, payable on June 1, 2022. This reflects the company’s improved performance.

MUSA’s total operating revenue increased 51.8% year-over-year to $6.77 billion in the second quarter ended June 30, 2022. The company’s operating income increased 37.9% from the year-ago value to $262.30 million, while its net income came in at $183.30 million representing a 42.3% increase year-over-year.

MUSA’s EPS rose 57.2% from the prior-year quarter to $7.53. Also, its adjusted EBITDA grew 29.5% year-over-year to $ 316.60 million.

For the third quarter ending September 30, 2022, MUSA’s revenue is expected to come in at $6.23 billion, representing a 35.5% year-over-year growth. Street expects the company’s EPS to increase 20.1% year-over-year to $4.79 in the current quarter. It has surpassed Street EPS estimates in each of the trailing four quarters.

Shares of MUSA have gained 89.3% over the past year to close the last trading session at $286.

MUSA’s POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

It has a B grade for Growth, Value, and Quality. It is ranked #2 of 46 stocks in the Specialty Retailers industry. Click here to see MUSA's other ratings for Momentum, Stability, and Sentiment.

JAKKS Pacific, Inc. (JAKK)

JAKK is a multi-line, multi-brand toy company that manufactures and markets toys, consumables, and related products through two segments: Toys/Consumer Products and Costumes.

For the fiscal second quarter ended June 30, 2022, JAKK’s net sales increased 96.2% year-over-year to $220.42 million. Its gross profit grew 91% from the year-ago value to $60.89 million, while its adjusted net income rose 999.2% year-over-year to $21.08 million.

The company’s adjusted EBITDA increased 444.3% year-over-year to $27.12 million. Also, its adjusted EPS came in at $2.10, indicating a 652.6% improvement year-over-year.

Analysts expect JAKK’s EPS and revenue for fiscal 2022 to increase 44% and 19% year-over-year to $3.73 and $739 million, respectively. Over the past six months, the stock has gained 144.6% to close the last trading session at $24.09.

JAKK’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which equates to a Buy in our proprietary rating system.

It has an A grade for Value and Sentiment and a B for Quality. Within the B-rated Entertainment - Toys & Video Games industry, it is ranked #3 of 22 stocks. Click here to see the other ratings of JAKK for Growth, Momentum, and Stability.

MUSA shares were trading at $284.98 per share on Monday afternoon, down $1.02 (-0.36%). Year-to-date, MUSA has gained 43.44%, versus a -12.27% rise in the benchmark S&P 500 index during the same period.

Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.

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