Do you have $3,000? These 2 stocks could be good buys for 2022 and beyond
Investors are worried about the possibility of a recession. They have good reason to think so: inflation is rampant and at 40-year highs, gasoline prices are at an all-time high north of $5 a gallon, and the Federal Reserve just implemented an increase in interest rates of 75 basis points, the largest increase in more than two decades.
Global investors withdrew more than $30 billion from equity funds last week, the biggest wave of selling since 2020 at the height of the pandemic. The tech sector alone saw nearly half a billion outflows. Bond funds saw an equal amount withdrawn and money market accounts were reduced by more than $40 billion.
Investors are massively turning to cash, leading the tech-laden market Nasdaq 100 tumble 32% so far this year. While understandable, smart investors should have kept some powder dry anyway to take advantage of this situation. A recession means stocks that were overvalued due to the prolonged bull market suddenly become affordable.
The next two companies could be the bargains of the year – and beyond.
Apple (AAPL 2.45%) is down about 25% from the all-time high of $182.01 it hit late last year. Much of this can be attributed to concerns about declining demand for the iPhone. Demand for smartphones is seen falling as the upgrade supercycle gets long in the tooth – but there’s still plenty of reason to bet that Apple will be able to run far ahead of the pack.
First, the iPhone 14 will arrive later this year. Vendors of the device are optimistic ahead of its release and confident that the product will not be affected by shipping delays and general market downturn. Apple also just released the latest MacBook Pro and refreshes the entry-level iPad with a USB-C port.
Macs had another quarter of record growth last quarter, with sales up 15% to $10.4 billion, and in fact, each of the past seven quarters has been a record for the lineup. And while iPad sales actually fell 2% last quarter, that was solely due to ongoing supply chain constraints. Demand for the device remains high and Apple’s iPad installed base hit a new all-time high during the quarter.
Morgan Stanley Analyst Katy Huberty told investors in a research note that Apple’s Worldwide Developers Conference earlier this month showed the company’s “innovation engine at full throttle.” Although even the high-end consumer has the potential to relax in the current environment, Apple has other levers to pull.
On the one hand, services will continue to grow in importance, and segment revenue in the last quarter reached $19.8 billion, now accounting for more than 20% of the total. According JP Morgan, Apple Pay has a chance of raising $4 billion by 2026, and that figure could be increased further thanks to the company’s new Apple Pay Later service. Additionally, Apple’s Arcade could generate up to $1.2 billion in the growing mobile gaming market. giant.
The deployment of 5G networks in the coming years is a major catalyst for Verizon (VZ -2.17%) as consumers spend more on enhanced video, augmented and virtual reality, and digital games on 5G networks (Apple stands to benefit as well).
Still, don’t expect Verizon to appreciate like other tech stocks — it’s a mature company in a mature industry. But you will find that it is a stable performer. Its stock is only down 6% this year, reflecting the stability of its business.
Revenue continues to grow at rates higher than just a few years ago, rising more than 4% last year to $133.6 billion, compared to a 2.7% decline in 2020 and an increase of less than 1% in 2019. Profitability is also improving markedly, jumping 24%. % in 2021 to 22 billion dollars against a drop of nearly 8% in 2020.
Verizon remains the largest carrier, ending 2021 with 91.4 million postpaid phone connections and 23.8 million prepaid connections. AT&T had 81.5 million postpaid subscribers and 19 million prepaid subscribers, while T-Mobile had 70.3 million and 21 million respectively.
Verizon lost customers, losing 36,000 net in the first quarter, but that was significantly better than the 178,000 lost a year ago. Its business segment, on the other hand, added 256,000 net postpaid subscribers.
Still, AT&T and T-Mobile are adding customers, over half a million each. But Verizon finally started to see success after launching its home broadband via a 5G network. In the first quarter, Verizon saw a 35% sequential increase in mmWave traffic, seen as the future of the industry and where Verizon is already the leader.
The company also just launched its Verizon Home Internet promotion, which gives 5G mobile customers the chance to get 5G home internet service for $25 a month, whether it’s LTE Home, 5G Home or Fios service. . The price is guaranteed for up to four years, which could prove attractive in these times of inflation. Customers are more willing these days to switch carriers at the best price and keep them committed to the service not only to maintain its customer base but also to limit churn and new acquisition costs.
The telecommunications giant is also a reliable and safe dividend stock, currently yielding 5.2% annually. It started paying out after its IPO in 2000 and has increased it every year since 2006. Verizon is easily a stock for 2022 and beyond.