Top 10 Companies To Buy Stock In

The year 2022 was a lousy one for the stock market. Even after factoring in dividends, the S&P 500 fell 19.4% in those 12 months, while the tech-heavy Nasdaq composite took a 33.1% haircut. The catalysts behind Wall Street's sell-off are all too familiar: Inflation, soaring interest rates, persistent recession fears and the Russia-Ukraine war snowballed into an avalanche of worries that investors couldn't ignore, and many previously high-flying stocks took a beating as the "risk off" mindset came to dominate markets. This, thankfully, provided a window of opportunity for investors to snap up great companies at a discount entering the new year.

top 10 companies to buy stock in

Before each new year, U.S. News selects 10 stocks to buy for the year ahead. Here's a rundown of the 10 best stocks to buy for 2023 and how each has fared thus far based on total returns, which include dividends:

First up is Apple, the largest publicly traded company in the world, if you exclude government-backed behemoths such as oil giant Saudi Aramco. Like other tech stocks, AAPL shares had a rough go of it in 2022, as recession fears and soaring interest rates spooked investors in the sector. Following a rare 26.4% pullback in 2022, Apple now trades at 26 times earnings, offering investors a sound entry point into the $2.5 trillion iPhone maker. Although its most recent earnings report technically missed expectations, that was more due to supply chain snarls than demand issues. In fact, Apple reported an active-installed base of more than 2 billion devices, and revenue in its high-margin services segment surpassed $20 billion. AAPL stock is bouncing back from its 2022 woes, with shares up 22.5% in 2023 through March 23.

While massive, established companies like Apple can offer investors some stability, smaller companies have more room for expansion and can boost portfolios. Enter the rapidly expanding coffee chain Dutch Bros, which for comparison's sake, is roughly 0.2% the size of Apple despite being worth about $5 billion. Revenue is growing like a weed, surging 48.4% in 2022. With initial roots on the West Coast, Dutch Bros locations are almost entirely in the West and Southwest, with 671 locations in 14 states through the end of last year. The small footprint of its drive-thru stores means they are relatively cheap to open, allowing for faster expansion. That shows up in the numbers: Dutch Bros opened 133 new stores in 2022, which works out to location growth of 25%. Shares are up 5.3% through March 23.

Next up is Citigroup, a nearly $90 billion multinational bank with both retail and investment banking arms. What Citigroup offers investors is twofold: First, it pays a healthy 4.6% dividend yield, which is a nice buffer for shareholders in an era of rising rates and high inflation. Importantly, that dividend is sustainable over time, with Citigroup using less than 30% of earnings to finance its payouts. Aside from its high dividend, Citigroup also looks like a value stock at current levels, trading for seven times forward earnings and just 0.47 times book value. Famed investor and financial guru Warren Buffett began buying Citigroup stock in the first quarter of 2022, and Berkshire Hathaway Inc. (BRK.A, BRK.B) now owns a roughly $2.4 billion stake in the company. Citigroup stock is down 3% in 2023 through March 23.

Another return pick from last year's list, this off-the-beaten-path stock is a $9 billion Latin American airport operator. The only industrial on this list, ASR also offers geographic diversification and is a mid-cap company that isn't on most investors' radars. The stock was a diamond in the rough in 2022, posting a total return of 17% in a bear market. It helps, of course, that passenger traffic has been surging: In February 2023, passenger traffic shot up 23.9% year over year, driven by a 25.6% surge in Mexico. Airport operators earn money when airlines rent out gates and pay landing fees, as well as from parking, ground transportation, airport retail and advertising, among other sources. ASR's largest airports are in Cancun, Mexico; San Juan, Puerto Rico; and Medellin, Colombia. The stock pays a 2.7% dividend, and shares have posted a total return of 24.2% in 2023 through March 23.

Taiwan Semiconductor Manufacturing, a $500 billion business and the dominant high-level foundry for advanced chips, is next on the list. In the semiconductor industry, foundries are companies that manufacture chips for other companies, and TSM enjoys a massive market share for chips 7 nanometers and under. Apple, which has started to shift its supply chain away from China, is one of TSM's biggest customers. The company reported fourth-quarter results that beat both top- and bottom-line expectations, with revenue jumping 43% and earnings per share surging 78%. Trading at just 14 times earnings and paying a 2% dividend, TSM is, incidentally, yet another Buffett holding, and its shares have been crushing it in early 2023, posting gains of 27.7% through March 23. TSM is the best-performing stock among the best stocks to buy so far in 2023.

Last up is Diageo, the $100 billion U.K.-based beverage giant. A consumer defensive stock, Diageo should be able to hold up in a strained macro environment, as alcohol tends to be relatively recession-resistant. As with tobacco, alcohol consumers tend to have a fair degree of brand loyalty, and the company's slate of elite brands gives it enviable positioning in its space, with bar staples such as Johnnie Walker, Guinness, Tanqueray, Don Julio, Smirnoff, Baileys, Ciroc and Bulleit all under its umbrella. Despite net sales jumping 21.4% in fiscal 2022, the stock fell with the broader market last year, losing 17.4%. That's largely due to its base in the U.K. and a bad year for the British pound. That slump can't last forever, and shares now trade for about 20 times forward earnings, a discount to its five-year average forward P/E of 24.4. The defensive DEO has traded more or less flat in 2023, adding 0.3% through March 23.

Remember IPOs? A cavalcade of companies went public in 2020 and 2021 as the stock market soared higher, thanks to the proliferation of cheap money and retail investors stuck at home with cash burning a hole in their bank accounts.

In 2022, stock markets have sunk as the Federal Reserve raised interest rates swiftly to combat the four-decade highs in inflation. Hawkish monetary policy and higher rates have vaporized the cheap money that drove big IPOs and demand for risky new issues.

That being said, a small bet can come up big if you back the right horse. Despite the strange economic climate we find ourselves in now, a few of the soon-to-be public companies will excel over the long haul. The trick is figuring out which ones.

Headline-grabbing names make some of these companies the most talked-about new IPOs of 2022. They provide a wide range of services, and many are uniquely positioned to thrive in the post-Covid economy.

*Note: Valuations are estimates, and are generally based on previous rounds of venture capital funding or company projections. They will almost certainly change when the companies actually go public.

Chime announced earlier this year that it was putting its IPO plans on hold, even after reportedly hiring Goldman Sachs to lead its effort. The fintech company was valued at $25 billion after a round of fundraising in August 2021, and reportedly was seeking a market cap of nearly $40 billion should it go public. But fintech companies have fallen by 55% over the past 12 months, making company execs queasy about an IPO now.

Big data has become a big obsession of companies operating in every industry. Databricks has become a leading purveyor of tools designed to simplify database management, implement AI and even just do great data visualization.

The company earned a valuation of $10 billion last August after raising more than $400 million in funding from Fidelity and others. Perhaps no company better encapsulated the exuberance of the 2021 stock surge, with its online community with tens of thousands of subgroups dedicated to an endless array of interests.

While tech companies are struggling with higher borrowing costs and skeptical investors, Better.com is feeling the pinch as the once-hot housing market starts to cool. Reports suggest that the mortgage loan company is rethinking its $8 billion SPAC deal, as it recently underwent a fourth round of layoffs.

To highlight how fickle these recent IPO companies can be, keep in mind that of the 10 companies profiled here, four are flat to down since their debut. This is only to say that investing in recent IPOs can be an unpredictable game, which is why experts generally recommend highly diversified portfolios.

In my opinion, their massive reach, and ability to engage consumers all over the world, and of all ages, make Disney a solid buy-and-hold stock for beginners. Even with a pandemic that forced the shutdown of their amusement parks for the better part of a year, the company still found a way to make its investors happy: the launch of its Disney+ video-on-demand streaming service brought in revenue from more than 118Platforms Inc million subscribers (and counting!) and allowed Disney to use its video library and new content to make it a strong Netflix competitor.

Personally, I think the Pinterest stock is a solid buy, and it could be a bargain right now. While their individual stock price has been somewhat of a rollercoaster since their IPO, it feels like almost every big tech stock experiences ups and downs in the early years.

If you want to be successful in the stock market, you cannot respond emotionally to market shifts or trending news topics. Stock investing is a long game. The only way to really see a return is to experience compounded growth, which builds up over years, as you continue to invest your money in certain funds.

In this article, we will take a look at the 10 best African stocks to invest in. You can skip our detailed analysis of these companies, and go directly to the 5 Best African Stocks to Invest In. 041b061a72