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During the past three months, the S&P 500 index pulled back 5% as the Federal Reserve continued to raise interest rates to combat inflation. The following high-quality stocks all rang up gains of 11% or better during the same time period.
 

Ross Stores $950 Million Share Buyback (ROST)

Ross Stores rang up $4.57 billion in third-quarter sales with net earnings marked down 11% to $342 million. During the first nine months of the year, Ross returned $1.043 billion to shareholders through dividends of  $324.6 million and share repurchases of $718.7 million. The company is on track to buy back a total of $950 million of its stock in 2022 under its two-year $1.9 billion repurchase program that extends through 2023. Given favorable sales and earnings comparisons in the fourth quarter, continued sales momentum, and improved holiday assortments, Ross raised its full-year sales and earnings outlook guidance with EPS now expected in the range of $4.21 to $4.34. In response, Ross Stores’ stock rang up a 27% gain during the past three months. Hold.
 

TJX Companies $1 Billion In Dividends YTD (TJX)

TJX Companies reported third-quarter sales declined 2.9% to $12.2 billion with EPS up 8.3% to $0.91. During the first nine months, TJX returned $2.8 billion to shareholders through share repurchases of $1.8 billion and dividends of  $1 billion. For the full year, TJX raised its EPS outlook to a range of $2.93 to $2.97. TJX’s treasure-hunt shopping experience continued to resonate with consumers throughout the quarter. TJX’s flexible business model works well in most economic environments as evidenced by the 31-fold increase in the stock price over the last 22 years. Buy.
 

Genuine Parts Double-digit Growth (GPC)

Genuine Parts reported third-quarter sales increased 18% to a record $5.7 billion with net income motoring 37% higher to $312.4 million. The double-digit sales and earnings growth was driven by the resilience of the Automotive and Industrial businesses. Free cash flow increased 15% year-to-date to $1 billion driven by higher net income and effective management of working capital. During the first nine months, Genuine Parts paid $369.5 million in dividends and repurchased $172.7 million of its common stock. Genuine Parts continues to gain market share and raised its sales and earnings outlook for the full year. In 2022, the company now expects 15%- 16% total sales growth and EPS in the range of $8.29-$8.39. Over the past 22 years, Genuine Parts’ stock has increased more than eight-fold while providing steadily growing dividends. Hold.
 

Starbucks Brews Up 8% Dividend Hike (SBUX)

Starbucks reported fiscal 2022 sales increased 11% to a record $32.3 billion with net income and EPS both down slightly over 20% to $3.3 billion and $2.83, respectively. During the fiscal year, Starbucks generated $2.6 billion in free cash flow. The company returned $6.3 billion to shareholders through dividend payments of $2.3 billion and share repurchases of $4.0 billion. Starbucks recently brewed up an additional 8% increase in the dividend, marking 12 consecutive years of dividend increases. In fiscal 2023, Starbucks expects sales growth of 10% to 12% and EPS growth near the high end of 15% to 20%. Over the past eight years, Starbucks’ stock has percolated 164% higher. Buy.
 

Ulta Beauty Double-digit Growth (ULTA)

Ulta Beauty reported second-quarter sales increased 17% to $2.3 billion with EPS up 25% to $5.70. Comparable store sales increased by 14% driven by an 8% increase in transactions and a 5.6% increase in average tickets. Year-to-date, free cash flow increased 22% to $420 million, and Ulta returned $441 million to shareholders through share buybacks. Based on the results for the first six months of fiscal 2022 and sales trends experienced to date in August, the company increased its outlook for fiscal 2022. Net sales are now expected in the $9.65 billion to $9.75 billion range on comp store growth of 9.5% to 10.5% with EPS of $20.70 to $21.20. Over the last four years, Ulta Beauty’s stock has provided a pretty 57% gain despite the pandemic. Buy.
 

Maximus $10.5 Billion In Awards (MMS)

Maximus’ fiscal year 2022 revenues increased 9% to $4.6 billion with net income down 30% to $203.8 million. Adjusting for COVID-19 response work, normalized organic growth was approximately 18% over the prior year and driven by contributions from all three business segments. Signed contract awards during the year totaled a record $10.5 billion with contracts pending (awarded but unsigned) of $800 million. These awards include the previously announced Centers for Medicare & Medicaid Services Contract for contact Center Operations valued at $6.6 billion. For fiscal 2023, Maximus expects revenues in the range of $4.75 billion to $4.9 billion and adjusted EPS in the range of $3.70- $4.00. In addition, Maximus expects free cash flow to range between $225 million and $275 million. With better-than-expected financial results, Maximus’ stock jumped 11% during the past three months. Buy.
 

Quarterly Rating Change From Buy To Hold

Nike Increased its Dividend by 11% (NKE)

Nike reported first-quarter revenues rose 4% to $12.7 billion with net income treading 22% lower to $1.5 billion. Gross margin declined 220 basis points to 44.3% due to elevated freight and logistics costs, higher markdowns in Nike Direct as excess inventory was liquidated, and foreign currency headwinds. Operating costs increased due to higher wages and other costs. The tax rate also increased significantly during the quarter. Nike expects to continue to liquidate excess inventories, primarily apparel, in the second quarter in what is expected to be a highly promotional retail environment. Nike currently does not see any economic slowdown and expects to gain market share in the next year despite uncertain macro conditions. Nike announced an 11% increase in its dividend, marking the company’s 21^st consecutive year of increasing dividend payouts. Hold.
 

NVR Double-Digit Growth (NVR)

NVR reported third-quarter revenues increased 16% to $2.8 billion with net income increasing 24% to $411 million. However, with rapidly rising mortgage rates, new orders decreased by 15% during the quarter to 4,421 units. The average sales price of new orders increased by 3% to $453,400 with first-time buyers facing affordability issues. The cancellation rate in the third quarter was 15% compared to 9% in the prior year period.

The backlog of homes sold but not settled as of September 30, 2022, decreased on a unit basis by 11% to 10,758 units and decreased on a dollar basis by 5% to $5.09 billion year-over-year. During the first nine months, the company repurchased 295 million shares for an average price of $4,690 per share. Hold.
 

T. Rowe Price Dividend Yields 3.9% (TROW)

T. Rowe Price reported third-quarter revenues declined 18.7% to $1.59 billion with net income falling 50.5% to $384.4 million. During the quarter, assets under management fell $79.7 billion to $1.23 trillion on market depreciation of $55.1 billion and net outflows of $24.6 billion. During the first nine months of the year, the company generated $2.28 billion in free cash flow. Year-to-date, the company spent $744 million to repurchase 2.5% of its outstanding shares. In addition, the firm paid dividends of $832.4 million with the stock now sporting a 3.9% dividend yield. Hold.
 

Texas Instruments Increased its Dividend by 8% (TXN)

Texas Instruments generated a 13% increase in third-quarter revenue to $5.2 billion with net earnings increasing 18% to $2.3 billion. The company announced an 8% increase in the dividend, marking the 19th consecutive year of dividend increases and a $15 billion increase in the share buyback authorization. These actions reflect leadership’s commitment to returning free cash flow to its owners. Hold.
 

Tractor Supply Resilient Business Model (TSCO)

Tractor Supply reported third-quarter sales increased 8% to $3.3 billion with EPS increasing 8% to $2.10 given the resilient underlying health of the business. Year-to-date, Tractor Supply returned $916 million to shareholders through dividend payments of $308 million and share repurchases of $608 million. Management raised its financial outlook for the year and now expects net sales in the range of $14.06 billion to $14.12 billion and net income in the range of $1.07 billion to $1.08 billion. Hold.
 

Quarterly Rating Change From Hold To Buy

Apple’s Free Cash Flow +20% To $111 Billion (AAPL)

For the full 2022 fiscal year, Apple’s revenues increased 8% to $394.3 billion with net income up 5% to $99.8 billion and EPS up 9% to $6.11. Apple’s active installed base of devices reached all-time highs for all major product categories thanks to the strength of Apple’s ecosystem and unmatched customer loyalty. Apple’s paid subscriptions to its services exceed 900 million, an increase of 155 million since last year. During the year, free cash flow increased by 20% to $111 billion. Apple paid $14.8 billion in dividends during the fiscal year and repurchased $89.4 billion of its common stock. Since the share repurchase program began, Apple has repurchased $550 billion of its common stock at an average price of $47 per share, demonstrating the success of the buyback program. Buy.
 

Paychex 46% Return On Equity (PAYX)

Paychex reported first-quarter sales increased 11% to $1.2 billion with net income increasing 14% to $379.2 million. During the quarter, the company paid $284.6 million in dividends and generated an impressive 46% return on equity. Management increased its adjusted EPS outlook for fiscal 2023, now expecting growth of 11% to 12% compared to 9% to 10% growth in previous guidance. Total revenue is still expected to grow from 7% to 8% in fiscal 2023. Paychex believes the firm is well-positioned for growth in fiscal 2023 and beyond as it experienced record revenue retention levels in the first quarter.

In addition, interest rate increases will provide a tailwind for float income. Management is balancing long-term investments with near-term cost discipline to navigate through uncertainty. Buy.

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