These 3 Stocks Could Outperform In 2022
With the new year right around the corner, investors might want to start thinking about the companies with the strongest prospects for 2022. There’s no better way to start off the year than by adding a few potential winners to your portfolio, but finding those types of stocks is easier said than done.
While the past few weeks in the market have certainly been challenging, the recent volatility has delivered valuable insight into which areas of the market are still in high demand.
Whether you are interested in stocks that have pulled back significantly from their highs, or market leaders that could continue running higher next year, there are plenty of intriguing opportunities for investors to consider at this time.
Let’s take a look at 3 stocks that are ready to rip in 2022.
1. Tesla
Tesla (NASDAQ:TSLA) stock has been facing heavy selling pressure to end the year, as the company’s CEO Elon Musk has been unloading billions of dollars in shares for tax purposes. This has caused the stock to fall well off of its 52-week highs, yet it’s important for investors to note that nothing has fundamentally changed about the company’s growth story.
Tesla is still the premier electric vehicle manufacturer in the United States and a company with plenty of upside in international markets like China. With Elon close to wrapping up his selling, the stock should be ready to rip back to highs in 2022.
Keep in mind that Tesla has some new vehicles coming to market soon, including the Cybertruck and a semi-truck offering, which could be positive catalysts for the share price. Tesla also achieved its best-ever net income, operating profit, and gross profit in Q3, which tells us that the company has plenty of momentum heading into next year.
The bottom line here is that Tesla is the market leader in the EV space thanks to best-in-class technology, an impressive network of superchargers, and a quirky and charismatic leader. Investors should expect big things from the stock in 2022.
2. PayPal
This fintech stock simply hasn’t been the same since the company abandoned a previously announced takeover of the social media company Pinterest (NYSE:PINS) back in October, yet that shouldn’t stop investors from looking at adding shares of PayPal Holdings (NASDAQ:PYPL) in 2022.
It’s a leading fintech company that enables digital and mobile payments on behalf of consumers and merchants, and the recent weakness might end up being a strong buying opportunity next year. Keep in mind that the digital payments industry has plenty of room to grow over the next decade, and this company’s strong network of merchants and consumers puts it in a prime position to capitalize.
Additionally, e-commerce is a huge trend that should help PayPal continue its growth trajectory in 2022 and beyond, as consumers and business owners commonly rely on this company’s electronic payments to handle their online transactions.
There’s a lot to like about the company’s application Venmo, which will be a payment option for Amazon (NASDAQ:AMZN) shoppers starting in 2022. Finally, the fact that Q3 payment volumes increased by 26% year-over-year to $310 billion suggests that secular trends are still very much in play for PayPal. According to MarketBeat’s consensus analyst price target data, PayPal stock has an average price target of $282.16, implying over 47% of upside at current levels.
3. EOG Resources
If you are a believer that inflation is anything but transitory, EOG Resources (NYSE:EOG) is a great stock to consider adding in 2022. It’s a Houston-based company that is one of the largest independent crude oil and natural gas companies in the United States.
Inflation could keep oil and gas prices heading higher, which means that the top names in the energy sector like EOG Resources could be in for plenty of price upside. It’s also a strong option to consider thanks to heavy cost-cutting measures that the company pursued in 2020 and 2021, which should lead to stronger earnings throughout the upcoming year.
This is also a stock that should be in for a strong 2022 thanks to its dividend payments, as the stock currently offers investors a 3.47% dividend yield. EOG trades at a 9.99 forward P/E ratio, which is certainly attractive given that the S&P 500 is trading at a 21.55 forward P/E. Look for EOG Resources to lead the energy sector if commodity prices continue to rally in 2022.