The stock market reacted negatively after Federal Reserve Chair Jerome Powell reiterated a tough stance against inflation, spurring investors to weigh the implications of higher interest rates in the upcoming months. The market struggled to maintain its recovery rally as the major indexes plummeted for a second week erasing the August gains.

Concerns over the possible continuation of aggressive interest rate hikes, inverted yield curve, the ongoing energy crisis in Europe, and signs of an economic slowdown in China are expected to keep the markets volatile in the near term.

Regardless of the market conditions, investors shouldn’t hesitate to buy The Hershey Company (HSY), O'Reilly Automotive, Inc. (ORLY), and BJ's Wholesale Club Holdings, Inc. (BJ) due to their strong fundamentals and solid growth prospects.

The Hershey Company (HSY)

HSY is an industry-leading snacks company that offers confectionery products and pantry items globally. Its offerings include chocolate and non-chocolate confectionery products, gum and mint refreshment, protein bars, spreads, snack bites, mixes, pantry, and food service lines under various iconic brand names.

On July 28, 2022, the company’s Board of Directors increased its quarterly dividend by 15% to $1.036 per share on the common stock, which is payable on September 15, 2022. This marks HSY’s 371st consecutive regular dividend on the common stock and reflects its strong performance.

HSY’s net sales for the second quarter ended July 3, 2022, increased 19.3% year-over-year to $2.37 billion. Its non-GAAP gross profit grew 12.8% from the year-ago value to $1.04 billion. The company’s non-GAAP operating profit increased 14.7% year-over-year to $526.91 million, while its non-GAAP net income increased 21.8% year-over-year to $372.42 million. Also, its non-GAAP EPS came in at $1.80, up 22.4% from the prior-year period.

Analysts expect HSY’s EPS and revenue for the fiscal third quarter ending September 30, 2022, to increase marginally and 10.6% year-over-year to $2.10 and $2.61 billion, respectively. It has surpassed the consensus EPS estimates in each of the trailing four quarters. The stock has gained 30.6% over the past year to close the last trading session at $228.67.

HSY’s POWR Ratings reflect solid prospects. According to our proprietary rating system, it has an overall rating of B, translating to a Buy. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

It has a B grade for Sentiment and Quality. It is ranked #27 out of 85 stocks in the B-rated Food Makers industry. Click here to see the other ratings of HSY for Growth, Value, Momentum, and Stability.

O'Reilly Automotive, Inc. (ORLY)

ORLY is a specialty retailer of automotive aftermarket parts, tools, supplies, equipment, and accessories. The company sells its products to both DIY and professional service provider customers. Its product line includes new and remanufactured complex automotive parts, such as alternators, starters, fuel pumps, and water pumps.

For the fiscal second quarter that ended June 30, 2022, ORLY’s sales have increased 5.9% year-over-year to $3.67 billion. The company’s gross profit grew 3.2% year-over-year to $1.88 billion, while its operating income increased marginally from the year-ago value to $798.55 million. Also, its EPS came in at $8.78, representing a 5.4% increase year-over-year.

Analysts expect ORLY’s EPS for the September 30, 2022 quarter to increase 4.9% year-over-year to $8.47. Its revenue for the current quarter is expected to increase 6.5% year-over-year to $3.71 billion. Over the past year, the stock has gained 16.4% to close the last trading session at $698.79.

ORLY’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.

It has an A grade for Quality. Within the B-rated Auto Parts industry, it is ranked #18 out of 66 stocks. Click here to see ORLY's other ratings for Growth, Value, Momentum, Stability, and Sentiment.

BJ's Wholesale Club Holdings, Inc. (BJ)

BJ is a warehouse club operator, concentrating primarily on the U.S. east coast. It provides a curated assortment focused on perishable products and continuously refreshed general merchandise, gasoline, and other ancillary services.

On June 10, 2022, the company announced opening four new clubs in Noblesville, IN., New Albany, OH., Wayne, N.J., and Midlothian, V.A., as a part of its expansion plan. This should help increase the company’s customer base.

BJ’s net sales increased 22.4% year-over-year to $5.01 billion in the second quarter that ended July 30, 2022. Its total revenues increased 22.2% from the prior-year quarter to $5.10 billion, while its operating income came in at $202.91 million, up 23.9% year-over-year.

Also, its adjusted EBITDA grew 24.3% from the prior-year value to $273.70 million. The company’s adjusted net income and adjusted EPS increased 27.3% and 29.3% from its year-ago value to $144.29 million and $1.06, respectively.

Street expects BJ’s EPS for the fourth quarter ending January 31, 2023, to increase 2.9% year-over-year to $0.82. Its revenue for the current quarter ending October 31, 2022, is expected to increase 8.3% year-over-year to $4.62 billion. The company has surpassed the EPS estimates in each of the trailing four quarters, which is excellent. Also, the stock has gained 26.5% over the past year to close the last trading session at $71.05.

BJ’s POWR Ratings reflect solid prospects. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.

It has a B grade for Growth, Value, and Sentiment. It is ranked #19 out of 38 stocks in the A-rated Grocery/Big Box Retailers industry. Click here to see the other ratings of BJ for Momentum, Stability, and Quality.

HSY shares were trading at $228.33 per share on Monday afternoon, down $0.34 (-0.15%). Year-to-date, HSY has gained 19.60%, versus a -14.14% 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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