10 Top Stocks To Buy for 2022

With a possible recession still looming amid the ongoing bear market, investors are wondering which stocks to place their bets on. The analyst community expects volatility to continue in the near term due to inflation, increasing interest rates and geopolitical unrest.

Needless to say, it’s important to keep a close eye on the market and make your own judgments.

Read: Looking To Diversify In A Bear Market? Consider These 6 Alternative Investments

Investment opportunities can come from many different sectors, and you should remain vigilant to find the best investment options for you and avoid expensive mistakes. If you’re looking to buy stock in 2022, here’s what you need to know.

Top 10 Stocks To Consider in 2022

Before we dive deeper into which stocks you should be buying in 2022 and why, here’s a quick rundown of the top contenders. All statistics are current as of Sept. 21.

StockPriceMarket Cap
Lithia Motors Inc. (LAD)$230.22$6.354 billion
Travel + Leisure Co. (TNL)$40.40$3.312 billion
Mueller Industries Inc. (MLI)$61.58 $3.476 billion
First BanCorp (FBP)$14.77 $2.774 billion
Herc Holdings Inc. (HRI)$113.19 $3.419 billion
Devon Energy Corp. (DVN)$65.12$43.128 billion
Marathon Oil Corp. (MRO)$25.76 $17.455 billion
Qualcomm Inc. (QCOM)$124.77 $143.104 billion
Berkshire Hathaway Inc. (BRK-A)$419,869$608.826 billion
Micron Technology Inc. (MU)$50.80 $57.386 billion

Stocks With Growth Potential for 2022

When companies have a strong leadership team, strong sales, a large audience and a good growth market, they offer solid long- and short-term opportunities for investors. Here are some to consider investing in for the current year. 

1. Lithia Motors Inc. (LAD)

Lithia Motors is a U.S. automotive retailer that operates 278 stores and sells products via hundreds of websites. In addition to selling new and used domestic, foreign and luxury vehicles and related financial, warranty and insurance services, Lithia operates auto maintenance and repair services and sells parts under the brand names Driveway and Green Cars.

The company covers all the automotive market bases — buyers and those priced out of the auto market who’ll have to repair their existing cars instead of replacing them.

Lithia is a dividend-paying stock. LAD is also value-priced, with a price-earnings ratio of 5.37 as of Sept. 21. Analysts call it a “strong buy.”

2. Travel + Leisure Co. (TNL)

Formerly known as Wyndham Destinations, Travel + Leisure is a hospitality products and services company that operates vacation ownership and travel and membership segments in the U.S. and internationally.

The company benefited from a return to travel in the first half of 2022, with Q2 revenues jumping 15.7% and earnings beating estimates. Analysts rate the stock a “strong buy” and set an average price target of $67.29.

3. Mueller Industries Inc. (MLI)

Mueller Industries manufactures and sells aluminum, brass and copper, as well as plastics, in North America, the U.K., the Middle East and China. The Tennessee-based company was founded in 1917. Its operating segments include piping, industrial metals and climate.

A strong second quarter has helped Mueller shares remain relatively stable, and analysts say the mid- and long-term outlooks are positive. They rate the stock a “strong buy” and call it undervalued — not surprising given its low 5.25 P/E ratio.

4. First BanCorp (FBP)

First BanCorp is the holding company for FirstBank Puerto Rico, which serves retail, commercial and institutional clients. The company’s quarterly and annual earnings and revenue results have been solid of late, and the stock pays a higher-than-average dividend yield of 3.25%.

Analysts rate FBP a “buy.” Their average price target is $17.60.

5. Herc Holdings Inc. (HRI)

Herc Holdings is a Florida-based equipment supplier that rents out aerial equipment, air compressors, compaction, earthmoving and material handling equipment, trucks and trailers and lighting equipment. It also provides equipment maintenance, repair, training and labor, among other services.

Yahoo Finance considers HRI undervalued and projects a 28% annual return for investors who buy now and hold the stock for five years.

Analysts rate the stock a “strong buy” with an average price target of $166.88.

High-Performing Stocks

To measure stock performance, analysts and investors should take into account the stock’s potential and ability to increase its shareholders’ wealth during an estimated period. Here are some of the best-performing stocks to keep on monitoring throughout 2022.

6. Devon Energy Corp. (DVN)

This company’s stock has performed well due to its capital return for shareholders, outstanding financial performance and geopolitical conditions that sent energy stocks soaring.

In June, Devon announced that it had entered into an agreement to purchase leasehold interest and other assets of RimRock Oil and Gas. The acquisition, which was completed in mid-July, is expected to increase Devon’s Williston Basin production by an average of 20,000 barrels of oil per day over the next year and add over 100 undrilled inventory locations, according to a July 21 press release.

Devon’s stock has gained 50.83% since the beginning of the year and 139.67% over the past year.

7. Marathon Oil Corp. (MRO)

Shares of MRO have advanced nearly 57% since the beginning of the year, while the Dow and S&P 500 have lost considerable ground. The effects of the Russian invasion of Ukraine are certainly a factor, driving share prices to just below their 52-week high before falling back some in June.

A great deal of uncertainty exists around the short-term energy outlook, according to the U.S. Energy Information Administration, but analysts still recommend MRO as a “buy.”

Value Stocks

When considering a stock, value investors tend to choose those trading for less than what they’re worth. The strategy includes measuring fundamental business metrics against the stock price with the hopes the price will rise alongside the company’s worth. Here are some of the best value stocks for 2022.

8. Qualcomm Inc. (QCOM)

Qualcomm is a major player in the wireless industry and a leader in the 5G and chipset market. While not without competition nipping at its heels, Qualcomm is a blue-chip stock with a 10-year history of increasing dividends, and analysts say it’s significantly undervalued right now, trading at 11.28 times earnings.

According to the company’s Q3 2022 report, earnings rose 53% while revenue jumped 37% year over year, CNBC reported.

At about $125, QCOM is a bargain compared to its average target price of $186.64.

9. Berkshire Hathaway Inc. (BRK-A)

It might seem counterintuitive that the world’s most expensive stock could be considered a good value, but consider this: Berkshire Hathaway is a holding company for businesses representing dozens of brands in industries as diverse as insurance, freight rail transportation, utilities, furniture, confections, batteries and recreational vehicles, to name a few, and it’s helmed by one of the world’s most successful value investors.

Berkshire Hathaway shares are down almost 7% since the beginning of the year. But the company is flush with cash it can use to gobble up growth stocks and buy back more shares, Seeking Alpha noted.

Diversified earnings, excellent management and a recent spending spree — a deal to acquire Alleghany, an insurance company, and the purchase of a 20.2% stake in Occidental Petroleum — which Barron’s says investors love, bode well for patient investors. Of course, most will have to buy a fractional share of the roughly $420,000 stock or pick up budget-priced Class B shares.

10. Micron Technology Inc. (MU)

Micron stock has taken a hit over the last year, but it checks a lot of boxes as a value stock — low price-earnings ratio, high earnings-per-growth forecast over the next year through the next five years, and an average target price at least 20% above the current price.

Thirty-one analysts following the stock have a consensus rating of “buy.” Their average price target is $71.93, in a range of $45 to $100.

Stephen “Sarge” Guilfoyle, Real Money columnist for TheStreet, believes that “demand for what Micron does will outpace supply and/or capacity for some time.” As for Micron’s financials, Guilfoyle noted that the “balance sheet is as clean as a whistle and gets high marks on the Sarge test.” That’s why some analysts say Micron is oversold and poised for serious gains.

Final Take

The stock market is in constant evolution, and those looking to invest need to pay close attention to its frequent ups and downs. When looking to invest in new stocks and diversify your portfolio, do your research and evaluate what’s best for you in the long run.

The guide above is meant to give you some insight into some of the best options in the stock market nowadays. Be aware that these conditions may vary over time.

Good To Know

Experts recommend investing in stocks over bonds if your goal is growth and you have a strong appetite for risk. Although stocks are more volatile than bonds, historically, they have produced larger long-term gains. If investing in individual stocks is too risky for you, consider a mutual fund that invests in a basket of growth stocks.

Stock Investment FAQ

Here are the answers to some of the most frequently asked questions about investing in stocks in 2022.
  • Will small caps do well in 2022?
    • Small-cap stocks are set to keep climbing in the current year. According to stock analysts, these alternatives are projected to have an edge over their large-cap counterparts. In recent months, the small caps have significantly outperformed stocks in the S&P 500, Dow and Nasdaq composite.
  • How do you pick stocks?
    • When picking stocks, the main goal is often to find good value. If you're looking to diversify your portfolio, look for trends in earnings, company strength, debt-to-equity ratios and dividend yield.
  • What are the best industries to invest in right now?
  • How do I buy stocks?
    • You can buy stock through an online stockbroker, a full-service broker or directly from the company. While you don't need a broker to buy stock, having a middleman could give you more options and simplify your life when investing.

John Csiszar and Daniela Rivera-Herrera contributed to the reporting for this article.

Data is accurate as of Sept. 21, 2022, and is subject to change. Information on analyst ratings was sourced from Nasdaq.

This article originally appeared on GOBankingRates.com: 10 Top Stocks To Buy for 2022

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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