With increasing inflation, sluggish economic growth, and interest rate increases, which stock sectors should investors turn to?
In November, the jobless rate fell to 4.2%, and experts predict that it will continue to fall throughout the year. Industrial output increased and motor vehicle production rose, suggesting that supply chain difficulties may slowly dissipate.
On the other hand, economic development may slow down, and with more inflation and rate hikes to come, it's apparent that certain industries or market sectors will outperform others. Two sectors will see success in the year to come: utilities and health care.
The utility sector offers basic services through regulated (governmental) or non-regulated providers under contract. Think of electricity, natural gas, and water as examples. If you're searching for a safe haven for your money in 2022, utilities may be a smart choice. During the COVID-19 virus epidemic, the utility overcame financial ill effects.
The greatest utility investments are firms with a strong financial profile and clear potential for expansion. Each of the businesses listed above fulfills those criteria, and each has the ability to produce above-average total stock returns.
3 UTILITY STOCKS TO CONSIDER IN 2022
EXELON (NASDAQ: EXC)
It's difficult not to include Exelon (NASDAQ:EXC) on a list of the finest utility stocks, and it's one of the top five publicly traded utility firms in America, with a market capitalization of $52 billion. The firm has erected a complete spider web of local power plants, ranging from fossil fuel plants to hydroelectric dams to nuclear reactors in 48 states, and serves millions of consumers..
Exelon stock, a regulated utility holding company operating primarily in the United States and Canada, may be undervalued, according to shares and valuation metrics. Its financial health and growth prospects merit a thumbs up, as does Wall Street's interest in its 2022 plans to reformulate the firm. A split will result in one regulated utility firm and the other's power-generating company.
ENTERGY (NYSE: ETR)
Entergy Corporation (NYSE: ETR), with a market value of $21 billion, provides electricity to three million clientele in the south, including Arkansas, Mississippi, Texas, and Louisiana. The firm's headquarters are in New Orleans and it has operations in several industries and markets, including gas, oil, nuclear power, coal energy, hydroelectric and solar. The firm has also left nuclear energy plants in the dust by promoting a long-term renewable energy mentality.
Entergy's track record for delivering consistent positive earnings expectations and dividends to shareholders is unrivaled.
CENTERPOINT ENERGY (NYSE: CNP)
CenterPoint Energy (NYSE: CNP), based in Houston, is a domestic utility firm that provides energy transmission and distribution, natural gas delivery, and energy services. Because of an Indiana power purchase agreement for a 300-megawatt solar installation in Indiana, the firm surpassed expectations and raised its quarterly dividend (+6.3% in October) by increasing its share price by 29%.
The firm holds more than $37 billion in assets and nearly 53 percent of the limited partner shares in Enable Midstream Partners, LP, a publicly-traded master limited partnership that develops natural gas and oil infrastructure assets.
Expect to see pharmaceutical and medical equipment companies on the rise as the health care sector normalizes. The most apparent option may appear to be stocks related to the COVID-19 epidemic, but think about emerging technologies as well for some excellent pointers.
3 HEALTH CARE STOCKS TO CONSIDER IN 2022
PFIZER (NYSE: PFE)
Pfizer Inc. (NYSE:PFE), a research-based, multinational pharmaceutical and biopharmaceutical company, creates and distributes medicines and vaccines.
As the world's nations continue to clash over the newest COVID-19 variant, omicron, Pfizer remains at the forefront and in high demand, which should improve its performance in 2022. Moderna and Pfizer have emerged as the biggest competitors in the race to distribute doses. The CDC's recommendations for people to acquire a COVID-19 booster following a virus attack has boosted Pfizer's stock significantly. Pfizer's revenues have grown as a result of vaccine sales, which have boosted Pfizer's results — adjusted EPS rose 129% in comparison to the same quarter last year and revenue increased 134% year over year (YOY), outperforming analyst expectations. The COVID-19 vaccine has almost doubled Pfizer's business.
ZIMMER BIOMET HOLDINGS INC. (NYSE: ZBH)
Zimmer Biomet Holdings Inc. (NYSE: ZBH) wants to profit from aging baby boomers and out-of-control obesity rates with its orthopedic and musculoskeletal implants.
Zimmer Biomet has acquired A&E Medical and its complete range of sternal closure devices, including sternal sutures, cable systems, and rigid fixation, as well as pacing wire and surgical punch goods.
Net earnings for the fourth quarter were $333.7 million, or $440.7 million on an adjusted basis, and net earnings on an adjusted basis were $1,181 million. For the fourth quarter, diluted earnings per share increased 3.2 percent to $1.59 over the prior-year period.
SEAGEN INC. (NASDAQ: SGEN)
Seagen (NASDAQ:SGEN) is a biotechnology firm that creates cancer therapies using antibody-drug conjugate technology. Its work focuses on developing new targeted small molecule therapies, and data from the first phase of SEA-CD40 for pancreatic cancer is anticipated in early 2022. Seagen also focuses on developing proprietary immuno-oncology therapies by developing antibodies..
For 2021, the firm announced net product sales of about $1 billion and $366 million for the third quarter. The firm also announced the debut of TIVDAK, a new drug for women who have previously survived cervical cancer.