US blue-chip stocks to invest in 2022

There are many ways to create a high-quality investment portfolio. However, it’s hard to beat blue-chip stocks on the time-tested path to long-term wealth.

But there is rarely a time when owning high-quality growth and passive income stocks mislead the investor. On the contrary, companies with a strong track record of earnings and dividend growth that can withstand periodic recessions tend to deliver the most reliable long-term results.

It is still essential to choose such blue chips with care. After all, a good company bought at an alarming price is likely to produce mediocre results.

So here are the top 10 blue-chip stocks to buy in 2022.

Verizon Communications Inc. (VZ).

Verizon is one of the three largest mobile phone networks in the United States. But unfortunately, the stock prices of all three companies have plummeted in recent months. Of these, Verizon is the most attractive for investors in dividend stocks. After all, AT&T Inc. (T) is cutting its dividend amid a complex corporate restructuring. Meanwhile, T-Mobile US Inc. (TMUS) does not pay a premium at all.

It leaves Verizon as the safest choice. The stock yields a 4.79% dividend yield and is back to where it was trading in March 2020 at the height of the COVID-19 sell-off. After that, however, Verizon will start reaping the benefits of the current 5G rollout cycle and see sentiment pick up again. At the same time, shares are sold at less than ten times earnings.

Visa (V).

Unlike most blue chips, Visa is not yet a large payer of dividends, and it gives only 0.7%. However, this is more than offset by its incredible growth. Over the past ten years, the company’s profit and free cash flow have increased by 16% and 15% per year, respectively. Unsurprisingly, it also managed to increase its dividend by 18% year-on-year, given its fast-growing earnings.

The problem with Visa is that shares are usually expensive. Investors pay for quality. However, in 2021 it sold off the claims of payment systems due to a slower economic recovery, particularly air transportation. Visa is closely tied to international transactions, which have been slowly growing due to the emergence of the covid delta strain. But business is returning to normal. Visa shares are now trading at less than 30 times forward earnings, a rare development for these stocks. Investors should buy at this price for a company that traditionally grows at 15% a year, as the store is down more than 20% from its recent highs.

Global Payments Inc. (GPN).

Visa had a non-working year. And for Global Payments, it was a disaster. Shares of the acquiring trading company fell by a shocking 40% in 2021. Global Payment is an intermediary that performs transactions. It supplies credit card readers to retail chains to assist them with refunds, currency transfers, anti-fraud, etc. Hardware and software are also given, and services are provided to support suppliers. It primarily concerns small and medium-sized businesses, although it also promotes e-commerce services. Owning payment acquirers is a natural addition for optimistic people about Visa and Mastercard Inc. (MA). It’s hard to imagine how one can thrive without the other. However, Global Payments is much cheaper than Visa or Mastercard. GPN shares are up 13-fold, and analysts predict they will grow at double-digit rates in the future as global travel picks up steam and the credit card sector recovers.

Hormel Foods Corp. (HRL).

Hormel Foods is a dividend aristocrat increasing investors ‘ dividends annually since the mid-1960s. It announced its latest 6% hike during Thanksgiving week, bringing the return on Hormel shares to 2.4%. The timing of this dividend increase was right, as Hormel now relies on turkey meat – much more than Spam (canned meat) – to boost profits.

Now the company is not only a traditional meat producer. Instead, Hormel has rapidly diversified into millennial products such as salsa, guacamole, nut butter, and plant-based meat alternatives. As a result, Hormel has achieved much faster organic growth than most of its competitor’s thanks to its forward-thinking product portfolio: its profits have tripled since the 2008 financial crisis.

Analysts predict a significant jump in earnings in 2022 as the company recovers from inflation concerns in 2021. The shares are traded at forward earnings. It is not bad for a company that has historically increased revenues by at least 10% per year and pays significant dividends.

Clorox (CLX).

Clorox was sent for cleaning in 2021. The company experienced a record-breaking year in 2020, with people stocking up on bleach and other essentials during the pandemic. However, record purchases led to a slowdown in 2021, as many people had extra supplies in their pantry. Problems with inflation also hit Clorox in terms of production.

Adding it all up, Clorox earned only about $ 5.50 per share in 2021. That’s a lot less than the $ 7.36 in 2020. Moreover, it is significantly lower than Clorox’s profit in 2019, which was $6.32 per share. Investors are nervous. However, analysts predict that Clorox’s earnings will exceed 2019 in 2023 and reach a new all-time high (even surpassing the pandemic year) in 2024.

After the pandemic, the company found itself strange as demand fell. However, in the long run, the company’s products are more important than ever. And with the stock down 16% in 2021, this is a real sell-off for Clorox shares.

Coca-Cola (CO).

Coca-Cola has been hit unexpectedly hard by the pandemic. Its sales fell 28% in the second quarter of 2020 at the height of COVID-19. More than most food and beverage companies, Coca-Cola relies on people being constantly away from home. Tons of soda and bottled water are drunk in stadiums, cinemas, restaurants, and other similar public places.

People stuck at home began to drink much fewer Coca-Cola products. However, this has turned Coca-Cola into a hidden player in economic recovery. This year, its revenue and profit are growing at double-digit rates as it returns to pre-tandem sales levels. In the future, analysts predict growth on average in the single digits. Meanwhile, the company’s stock is just 22 times forward earnings, offering a reasonable entry point for one of the world’s most iconic brands.

Brown-Forman (BF.B).

Brown-Forman is a leading spirits company known for the iconic Jack Daniel whiskey brand. The company also has a range of other liqueurs. In particular, the company bought a significant tequila producer Casa Herradura in the mid-2000s, ahead of the hype in this now popular category. Over the past 30 years, Brown-Forman shares have been among the most profitable American companies that have gone unnoticed. Investments for $10,000 in December 1991 would now be worth $419 000.

What made the company so successful? First, it’s a family-owned business, and management runs it with an eye on dominating for decades, rather than worrying about the next quarter. Second, the company quickly recognized the potential of tequila, emerging markets, and new product categories such as ready-to-drink spirits in cans. Third, Brown-Forman’s stock has struggled since the pandemic, as bars have been operating under restrictions and shortages affecting the supply chain. However, the company should be back to normal within 12 months.

Becton, Dickinson and Co (BDX).

Becton, Dickinson and Co. is a leading diversified healthcare company. First of all, it provides the necessary tools for operations, such as needles and syringes. The company is also a leader in various niche medical applications, such as catheters and dialysis access instruments. The company also has a medical device division and a diabetes business, based on which it wants to create a separate company in 2022.

Becton, Dickinson has become a leader thanks to its strong product lines. In addition, the company is a dividend aristocrat that rewards shareholders with an annual increase in payouts over decades. As a result, BDX typically trades at a premium valuation compared to the S&P 500. However, stocks lag after the pandemic due to delays in scheduled operations. As treatment schedules return to normal, the stock should rise. And in the long run, the company is an ideal way to play on the demographic trend of the world’s ageing population.

Lockheed Martin (LMT).

Principal defence contractor Lockheed Martin has had a rough year. The stock has declined slightly this year and lagged far behind the market. Investors sold off defence stocks sharply after the withdrawal of troops from Afghanistan, which gave the impression that it would reduce defence spending. However, this overlooks that companies such as Lockheed Martin are awarded multi-decade contracts for critical defence assets, such as fighter jets.

Short-term policy changes are unlikely to impact Lockheed Martin’s revenue outlook significantly. Stocks came under pressure due to investing in the environment, social sphere and management, or ESG. Unsurprisingly, many socially conscious investors don’t want to own gun manufacturers. However, this creates more opportunities for everyone else.

Analysts believe that Lockheed continues to show strong profit growth. Meanwhile, the stock trades for just 13 times forward earnings and offers a dividend yield of 2.97%.

Walmart (WMT).

Walmart has had an exciting couple of years. Initially, it looked like a significant beneficiary of the pandemic. Meanwhile, the company was finally able to kick-start its e-commerce business, as people started ordering groceries and daily necessities through its website and app. However, Walmart stalled in 2021, and its stock has fallen several per cent since the start of the year.

The company faced numerous labour shortages and higher inventory and logistics costs, affecting its profit margins. However, Walmart needs to make steady gains in its e-commerce business in the longer term, and the cost issues will eventually resolve themselves. Walmart sells shares for just 21 times forward earnings, with the stock having fallen slightly recently.

Part shares blue chips you can buy on the stock exchange, some on the OTC market. One of the most popular CFD brokers – Forex.com, provides access to these markets.

You can invest in shares of almost any of the above-listed dividend blue chips by using its tools and services.

To do this, you need to register at Forex.com, open an account and start trading the financial instruments offered by the broker.

? Best Brokers for Blue-chip Stocks

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