Value Stocks to Consider Adding to Your 2022 Investing Plans
With rising interest rates on the horizon thanks to persistent inflation concerns, value stocks could be in for a strong year ahead. This is already evident in the market moves to start the year, as many high-flying growth stocks have been pummeled while companies with more affordable valuations are seeing strong inflows. In a market that has gotten quite expensive over the last few years, focusing on value could actually pay off in a huge way regardless of how quickly the Fed moves to tighten financial conditions.
Value investing is all about finding stocks that are trading at a bargain relative to their earnings and future growth potential, which has become increasingly difficult given how big of a move equity markets have made off pandemic lows. With that said, there are still quite a few quality companies that are trading at attractive valuations and could be poised for a strong year ahead.
We’ve put together an overview of the top 3 value stocks to buy now to help you identify some potentially undervalued investment opportunities to target. Let’s take a deeper look below.
EOG Resources Inc (NYSE: EOG)
Energy stocks are a good area of the market to look for value as many of these companies are still trading below their pre-pandemic price points. Considering that the demand for oil can continue to rebound in 2022, especially if travel volumes and economic activity rebound, it makes sense to consider adding some energy exposure to your portfolio. EOG Resources stands out as a strong option to consider, as it's one of the largest independent crude oil and natural gas companies in the U.S. and a stock that is already off to a great start in 2022.
With a forward P/E ratio of 11.33 versus a forward P/E of 22.35 for the S&P 500, EOG Resources offers value and the potential for outperformance if commodity prices continue rising. The company consistently beats industry averages for initial production rates from its shale wells and has strong assets in the Permian Basin, the Eagle Ford Shale, and the Powder River Basin that should provide plenty of production this year. EOG Resources also recently boosted its dividend by 82% and provided long-term shareholders with a $2.00 per share special dividend back in November, which are signs of a financially stable company that has plenty of cash available to return to shareholders after strong cost reduction initiatives.
Biotech giant Amgen is another stock offering value in today’s market thanks to a 13.66 forward P/E ratio and attractive 3.37% dividend yield. Investors are likely underrating this innovative company’s business as we head into 2022, as Amgen’s drugs should be prescribed with greater frequency as patient office visits increase following the pandemic. Amgen’s acquisition of the drug Otezla could also be a nice growth driver in 2022 to consider. It’s always a good idea to familiarize yourself with a biotech company’s blockbuster drugs before adding shares, and Amgen has several.
Prolia is used to treat osteoporosis and bone cancer, Enbrel is used for treating five chronic diseases including Rheumatoid Arthritis, and Neulasta helps cancer patients lower the risk of infection when they have low white blood cells. Each one of these drugs contributes a significant amount of revenue for the company each quarter that should keep that appealing dividend safe, although the drugs will face competition from biosimilars going forward. With that said, Amgen has been working on its own biosimilar business and has several late-stage pipeline assets that could be strong growth drivers going forward. With the stock recently reclaiming the 200-day moving average and trading at a very appealing valuation, Amgen stands out as a nice value play to consider in a sector that might be ready to bounce.
Another solid value stock to consider adding at this time is Chemours, a major provider of performance chemicals. The company’s products include titanium dioxide pigments, refrigerants, industrial fluoropolymer resins, sodium cyanide, and more. These products play an important role in end markets including plastics and coating, refrigeration and air conditioning, electronics, mining, oil refining, and general industrial, which are all nicely positioned to bounce back strong in 2022. The stock is also trading at a very attractive 8.54 forward P/E ratio, which is a significant discount compared to the S&P 500.
Chemours offers exposure to interesting trends like 5G infrastructure and hydrogen production that could be long-term growth drivers for its business. The company also delivered Q3 adjusted EBITDA of $372 million, up 77% year-over-year, which might be a sign of stronger quarters to come. Finally, a 2.85% dividend yield makes this a value stock that belongs on your shopping list. Keep Chemours in mind if you are interested in adding one of the most well-run chemicals companies on the planet to your investing plans.
Before you consider Chemours, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Chemours wasn't on the list.
While Chemours currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.
View The 5 Stocks Here
Companies Mentioned in This Article
Compare These Stocks
Add These Stocks to My Watchlist