5 Stocks That Will Outperform in 2022 - King Feed

5 Stocks That Will Outperform in 2022

 Investing in valuable stocks has become a major part of our economy. Millions of people around the world, from retail to institutional level are participating in the free market economy that allows anyone to make money off successful companies's profits. 





It's pretty easy to make money when the economy is flourishing but how can you keep making money during high inflation or recessions? We think we know how. In this article we will break down the 5 stocks we think will do well during high inflation periods and will be able to keep your portfolio safe even in the worst economic conditions.



1. Realty Income Corporation(O)
Realty Income Corporation is a real estate investment trust that invests in free-standing, single-tenant commercial properties in the United States, Spain and the United Kingdom that are subject to NNN Leases. The company is organized in Maryland with its headquarters in San Diego, California. 


WHY?
We believe this is the top investment pick during high inflation periods as its business model involves long term leasing to big companies that many of them are grocery stores or other consumer staple related buildings. These leases are not affect during economic bumps as they are under long term contracts.

This Real Estate Investment Trust(REIT) is one of the few stocks that pays out a monthly dividend which means it can provide you with cash flow even if your portfolio is in the red making it a great overall recession proof stock.


2. PepsiCo(PEP)
PepsiCo, Inc. is an American multinational food, snack, and beverage corporation headquartered in Harrison, New York, in the hamlet of Purchase. PepsiCo's business encompasses all aspects of the food and beverage market. It oversees the manufacturing, distribution, and marketing of its products.


WHY?
During poor economic conditions stocks that produce and sell consumer non durables(food, drinks, other necessities) tend to outperform growth stocks and consumer durables. Pepsi can be well priced during inflation without losing profit. They own a massive portfolio basket of companies across the globe which makes their income streams even more safe during uncertainty. 

Pepsi also provides dividends to its investors which can come in handy when volatility hits the Equities market.


3. Diageo(DEO)
Diageo plc is a British multinational beverage alcohol company, with its headquarters in London, England. It operates in more than 180 countries and produces in more than 140 sites around the world.



WHY?
The UK Economy is well positioned to be a safe haven for investors during high inflation, its central bank already raised their interest rates and inflation is one of the lowest from the Western Economies. Diageo's broad reach across 180 countries around the globe puts it in a very strong advantage that will help it thrive during uncertainty. On top of that, Diageo has a buyback program that will boost the stock price in the coming years. Diageo is also a dividend stock. 



4. Kimberly Clark(KMB)
Kimberly-Clark Corporation is an American multinational personal care corporation that produces mostly paper-based consumer products. The company manufactures sanitary paper products and surgical & medical instruments.


WHY?
This company is run under a conservative 1-3% growth target per year which means they have the ability to keep investors happy even when the economy is not flourishing.  Kimberly Clark has been in business for 149 years and their products are sold in over 175 countries around the globe. Their high dividend yield of around 4% will also provide investors with a steady earnings income during uncertainty.



5. Verizon(VZ)
Verizon Communications Inc., commonly known as Verizon, is an American multinational telecommunications conglomerate and a corporate component of the Dow Jones Industrial Average. The company is headquartered at 1095 Avenue of the Americas in Midtown Manhattan, New York City, but is incorporated in Delaware.


WHY?
Verizon is an extremely undervalued stock(9,2 P/E Ratio) and pays a massive high dividend. It's well positioned to perform well during uncertain economic conditions as its business model involves necessary consumer services(communication, internet etc) that cannot really be affected during harsh economic periods. 


How to stay financially safe in the stock market during economic uncertainties:

1. Use a 70/30 investing strategy, stay invested with 70% of your money and keep 30%(or even more) of your cash uninvested so you can quickly buy opportunities when they present themselves.

2. Invest the amount you are absolutely sure you don't care about losing, even professional traders do this to keep them calm during volatile market conditions.

3. Choose dividend stocks over growth stocks. They will provide you with an extra source of income and you will have more cash to invest when uncertainty is over.



This article is only for information purposes and it's solely our opinion and should not be taken as expert financial advice. Investing involves risks of losing your money. Avoid using leverage if you are a beginner.

No comments