Needless to say, 2021 has been a banner year for equities, with the S&P 500 up a stunning 25%. While the going was pretty easy by historical standards, with only one 5% drop year to date, there is a good chance that 2022 could bring some tougher sledding. The tapering of the quantitative easing program, which was designed to keep interest rates low, starts this month, and some feel that the Federal Reserve may be forced to raise interest rates earlier than expected due to the surge in inflation.
Given the potential for a more difficult 2022, the equity strategists at BofA Securities are focusing on three top sectors to own for 2022, and one with some of the biggest upside potential is health care, after it underperformed the S&P 500 in 2021. In a new research report, the firm coins the term “the forgotten sector” when referring to health care. The report said this:
We had a health care crisis, US Health Care companies saved the world from a deeper recession, the U.S. government, consumers and corporations are likely to spend more on Health Care in the years to come – but the sector has underperformed the S&P 500 by 15% since the beginning of 2020.
We screened the BofA Securities health care universe looking for stocks rated Buy that offered big dividends. With the potential for far lower returns next year, total return becomes a key ingredient for investment success. Five top stocks look like very solid ideas for 2022. While they all are rated Buy, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
This stock offers investors a solid entry point after being hit hard in November. AstraZeneca PLC (NYSE: AZN) is a global, innovation-driven biopharmaceutical business that focuses on the discovery, development and commercialization of prescription medicines, primarily for the treatment of cardiovascular, metabolic, respiratory, inflammation, autoimmune, oncology, infection and neuroscience diseases. AstraZeneca operates in over 100 countries, and millions of patients worldwide use its innovative medicines.
This company also has an outstanding pipeline, especially in oncology. The broad pipeline of next-generation investigational medicines is focused on four main disease areas: ovarian, lung, breast and haematological cancers. These are being targeted through four key platforms: immuno-oncology, the genetic drivers of cancer and resistance, DNA damage repair and antibody drug conjugates.
Shareholders receive a 2.48% dividend. BofA Securities has a $69.40 price objective for AstraZeneca stock. The consensus target is $69.28, and the closing share price on Tuesday was $56.73.