Fast Money Blog- 2/24/23
The big news this week on Wall Street were the earnings results from some more major companies.
On Tuesday, February 21st, The Home Depot, Inc. (HD) released their Q4 2022 earning results.
The company reported quarterly revenue of $35.8 billion, an increase of .3% year-over-year.
Sales for fiscal 2022 were $157.4 billion, an increase of 4.1% from fiscal 2021. Comparable sales for fiscal 2022 increased 3.1% from 2021.
The Great News for HD Employees and Shareholders
The company is raising its hourly wage to at least $15 per hour, investing an additional $1 billion in yearly compensation for frontline, hourly associates.
In addition, Home Depot's board approved a 10% dividend hike, which takes the annual dividend to a whopping $8.36 per share!
It’s clear HD stock is a winning date for both the short and long-term. The dividend raise makes HD a Dow Jones Industrial Average standout. Over the next 52 weeks I see major banks, insurance companies and college endowments purchasing even more shares in an effort to take advantage of HD’s unstoppable dividend payout.
On Wednesday, February 22nd, the Federal Reserve held their monthly meeting, indicating that there are signs inflation is coming down, but not enough to stop interest rate increases. As a result, the Fed approved a 0.25 percentage point rate increase, the smallest hike since March 2022 when these hikes first began.
For Q4 2022 Block, Inc. (SQ) reported revenue of $4.6 billion, up 14% year-over-year.
For the full year of 2022, total revenue was $17.5 billion, down 1% year over year. Almost 50% of their revenue came from their Cash App.
Major categories broke down like this:
Subscription and services-based revenue was $1.3 billion in the fourth quarter of 2022, up 69% year over year.
Square, AMD’s mobile payment company, generated $1.7 billion of quarterly revenue, up 19% year-over-year.
Cash App generated $2.8 billion of revenue for the quarter, up 12% year-over-year.
The trouble spot for Block is that it’s Cash App business Bitcoin revenue was only $35 million in Q4, a 25% drop year-over-year. The company attributes this decrease to the declining prices of the leading cryptocurrency.
This lead to a reported net loss of $114 million in Q4, which includes a $2 million impairment loss related to bitcoin.
Because of this loss I consider SQ to be a high-risk stock and I would not recommend it at this time.
Although this week we saw the market decline slightly in the end, I believe the stock market's reaction to this week’s economic data will be short termed.
Tyrone Jackson, The Wealthy Investor