The first month of the year 2022 is about to come to a close and you’re probably wondering what stocks to consider buying. So, I’ve decided to compile five of my stock picks for the month of February.
Berkshire Hathaway
Warren Buffett has made a name for himself in the business and investing world. He’s regarded as one of the greatest investors of all time. If you want to enjoy a tiny share of his success, you should consider investing in his firm, Berkshire Hathaway.
Berkshire Hathaway is a conglomerate that owns Duracell, Geico, Fruit of the Loom, and other famous firms in America. The company follows a value investing philosophy and owns huge stakes in several heavy hitters such as Coca-Cola and American Express.
The company, under the watch of investment managers Ted Weschler and Todd Combs, has been buying positions in tech companies, such as Apple, Amazon, and Snowflake.
Over the years, the public has been wondering who would take over Buffett’s mantle as the CEO of Berkshire Hathaway. After much suspense, the Oracle of Omaha finally revealed that it would be Greg Abel, who’s the chairman and CEO of Berkshire Hathaway Energy.
In the company’s latest earnings report, it was revealed that Berkshire Hathaway bought $7.6 billion of its own stock. It seems like Buffett has had a change of heart since he’s been always reluctant when it comes to stock repurchases.
However, in his latest annual letter to shareholders, he explained that repurchases let investors “own an ever-expanding portion of exceptional businesses.”
Berkshire Hathaway’s smorgasbord of businesses, including those that operate in the energy, utilities, and railroads sectors have started to pick up as the coronavirus impact eases and the economy reopens.
The Berkshire Hathaway stock increased by 33% in the past 12 months and its IBD composite rating now stands at 90 out of 99. Its earnings have improved as well, which rose by 26% over the last three quarters. Wall Street also has a positive outlook for Berkshire Hathaway.
- At Closing = 461,200.00
- 52 Week Range = 343,000.00 – 487,255.00
- Market Cap = 686.897B
- PE Ratio = 8.20
- EPS = 56,269.56
Coca-cola
If you’re looking for the best dividend stock to buy, Coca-Cola should be on top of your list. The company is regarded as a dividend aristocrat because it managed to pay and raise its dividend over the past 59 years without fail. With investors focusing more on growth, Coca-Cola’s stock is reasonably valued.
Coca-Cola has been in business for 135 years and is considered as the world’s sixth most powerful brand. Over the years, the company has gone through a lot of changes. Aside from its flagship product, the company’s CEO James Quincey has snapped up other popular drink makers such as tea, coffee, sports drinks, as well as energy drinks.
The company made the headlines when it acquired Bodyarmor for a massive $5.6 billion. It was a smart move given that PepsiCo’s Gatorade holds 70% of the market share when it comes to sports drinks. With PepsiCo taking the first spot, Coca-Cola’s Powerade ranks second.
However, Bodyarmor surpassed Powerade as a healthier choice. With Bodyarmor ranking second and Powerade, in the third spot, Coca-Cola’s decision to acquire both companies strengthens its position in the market.
PepsiCo’s dominance is unlikely to fade anytime soon. However, Coca-Cola will benefit from owning Bodyarmor since its retail is expected to rise about 50% to more than $1.4 billion.
Aside from Coca-Cola’s aggressive strategy in terms of its acquisitions, it also made some improvements to its marketing strategy. The company’s management is now paying attention to the methods used to attract new clients, measure results, and get rid of plans that don’t work.
- At Closing = 59.65
- 52 Week Range = 48.11 – 61.45
- Market Cap = 257.653B
- PE Ratio = 29.37
- EPS = 2.03
NextEra Energy, Inc.
NextEra Energy, Inc. has been investing heavily in clean energy. Thanks to its effective strategy, the company has been growing faster than its rivals and managed to pay massive dividends last year after it grew its adjusted earnings per share by over 10%.
Its better-than-expected growth rate helped the company deliver an impressive total return of 23% last year. The company’s growth is expected to continue at an above average rate in the coming years, which means better returns for investors.
NextEra recently adjusted its outlook for the year 2022 and 2023 as well as its forecast until 2025. For the year 2022, the company expects its adjusted earnings to be anywhere between $2.75 and $2.85 per share from its previous forecast of $2.55 to $2.75 per share of earnings.
In 2023, the company expects to generate between $2.93 and $3.08 of adjusted earnings per share, which marks an increase from its previous expectation of $2.77 to $2.97 per share. It also forecasted an adjusted earnings per share range of $3.35 to $3.60 in 2025.
Several factors are contributing to the accelerated growth of the company. These include making sizable investments in clean energy as well as grid modernization, acquiring Gulf Power, and taking advantage of the growing demand for renewable energy.
- At Closing = 72.51
- 52 Week Range = 68.33 – 93.73
- Market Cap = 142.275B
- PE Ratio = 40.06
- EPS = 1.81
Mcdonalds
McDonald’s sales are up thanks to the great demand for chicken sandwiches and higher prices. The company’s last quarter US sales were up by 7.5% in the fourth quarter last year because of the increase in its menu price, effective digital sales and limited-time offers like the McRib.
Just like other companies, McDonald’s has increased its prices due to inflation, and it’s been well received by consumers. According to a report by the Bureau of Labor Statistics, restaurant prices rose by 6% in 2021.
McDonald’s is doing well even as the world continues to battle the coronavirus pandemic. However, its report of $6 billion revenue for the quarter missed analysts’ expectations. The company’s earnings per share also missed the expectations of Wall Street. But the company also noted that its sales in international markets such as the UK and France, grew because fewer restaurants closed down because of the pandemic.
- At Closing = 248.74
- 52 Week Range = 202.73 – 271.15
- Market Cap = 185.87B
- PE Ratio = 25.64
- EPS = 9.70
3M
3M is struggling right now because of supply chain problems and inflation. Its stock has been down in the past 6 months. But there are many reasons why investors should consider buying the stock instead of selling.
3M provides thousands of products to different industries across the world. However, its business has suffered tremendously due to the global supply chain challenges. But these issues are short-term. It will eventually pass and the company will soon be back on its feet.
If you check on the company’s financials, the company is regarded as a Dividend King because it has paid annual dividends for more than 50 year. The current dividend yield of 3M’s stock is at 3.3%, making the business a solid and stable income investment.
The company has also performed well in growing its free cash flow in the past years, which allowed it to have more money to boost its dividend, to set aside funds for possible acquisitions, and even repurchase shares. With more cash flow, the management will have more resources to create value for its investors.
- At Closing = 170.16
- 52 Week Range = 168.01 – 208.95
- Market Cap = 97.305B
- PE Ratio = 16.81
- EPS = 10.12
Etsy
These days, ecommerce stores are booming and Etsy is one of the leading companies in this sector. It offers personalized products that consumers love to purchase. Amazon launched its own version called Handmade. However, since it’s launched, it only helped Etsy more. The latter’s sales have quadrupled since then. Etsy has sold 12 billion in merchandise and its online market is estimated to be $100 billion in size.
Etsy’s stock dipped in the latest trading session. However, Wall Street still expects positive reports from the company as its next earnings report draws near. Analysts predict that Etsy’s quarterly revenue will be up by 11.07% to $685.68 million.
- At Closing = 139.54
- 52 Week Range = 136.00 – 307.75
- Market Cap = 17.691B
- PE Ratio = 41.44
- EPS = 3.37
Thank you for staying with me until the end. As promised, here are two bonus stocks that’s worth adding to your portfolio.
Bonus
Nvidia
There are many reasons why you should invest in Nvidia. The company has been developing in-demand and innovative technology and it’s taking the world by storm with artificial intelligence. The company is one of the pioneers when it comes to graphics processing. It revolutionized the field when it introduced GPU back in 1999.
The company holds an 83% share of the GPU market. Nvidia GPU is regarded as the main gaming chip, with AMD and Intel lagging behind. The company has gone beyond games. It managed to create chips that can make associations and recognize patterns, which is essential in the AI market.
Nvidia also expanded its business and entered the cloud sector. It created higher versions of GPUs that can be used to power major cloud computing operations from big names such as IBM Cloud, Amazon’s AWS, Alphabet’s Google Cloud, Microsoft Azure, and more.
- At Closing = 219.44
- 52 Week Range = 115.67 – 346.47
- Market Cap = 546.844B
- PE Ratio = 67.67
- EPS = 3.24
Shopify
Shopify has appreciated by 3,000% since it went public back in 2015. It has performed well and has been regarded as a big winner. That’s why you should consider adding it to your investment portfolio.
The company saw a boost in growth during the lockdowns back in 2020. Its revenue growth increased in triple digit percentages as people sought out alternatives after brick and mortar stores were closed down because of the pandemic. Many businessmen opened online stores through Shopify and some used the platform for their side gigs while they were stuck at home.
Shopify is expected to continue its good performance, making it a perfect long term investment. It seems like e-commerce is set to become an important part of the economy. When that happens, Shopify will be one of the companies that will dominate the sector.
- At Closing = 815.76
- 52 Week Range = 780.00 – 1,762.92
- Market Cap = 103.185B
- PE Ratio = 30.22
- EPS = 27.00
That’s all for today. Thank you for reading. Remember guys, that these stock picks are my personal selection. I am not a financial guru but I’m more than willing to help you by providing you with information about the stocks that are worth considering if you’re looking to expand your portfolio.
If you found this blog relevant and useful, feel free to click the share button or you can comment in the comments section below. You can also check out my previous blogs such as “Investing Tips For 2022“. Don’t forget to signup to my newsletter so you’re always notified whenever I post new blogs. I really appreciate it. Thank you so much for your time. See you soon.
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Recommended books for further reading:
- Intelligent Investor: The Definitive Book on Value Investing – A Book of Practical Counsel
- The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits
- Stock Market Investing For Beginners: The Investment Guide – How to benefit from the crisis, invest in stocks and generate long-term passive income incl. ETF and Stock Picking Checklist
- Investing QuickStart Guide: The Simplified Beginner’s Guide to Successfully Navigating the Stock Market, Growing Your Wealth & Creating a Secure Financial Future
- The Five Rules Successful Stock Investing: Morningstar’s Guide to Building Wealth and Winning in the Market
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