Investing

BofA Securities Out With Its 11 Top Stock Picks for 2022

Energy: Exxon Mobil

Shares of this mega-cap energy leader backed up nicely as oil sold off recently, and they still offer investors an excellent entry point. Exxon Mobil Corp. (NYSE: XOM) is the world’s largest international integrated oil and gas company. It explores for and produces crude oil and natural gas in the United States, Canada, South America, Europe, Africa and elsewhere.

Exxon also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and specialty products, and it transports and sells crude oil, natural gas and petroleum products.

The company announced recently that ExxonMobil Catalysts and Licensing has introduced ExxonMobil Renewable Diesel (EMRD) process technology to help meet the evolving needs for mobility, while utilizing renewable feedstock. This new process technology converts feedstocks including, but not limited to, vegetable oils, unconverted cooking oil and animal fats into renewable diesel. Due to significant interest in producing renewable jet fuel as a primary product, Exxon is also developing advanced catalyst and process technology solutions that will offer EMRD process licensees flexibility to tailor the amount of jet fuel versus diesel produced.

The company pays investors a 5.86% dividend. BofA Securities has set a massive $95 price target. The consensus target is $72.25, and the stock closed at $60.03 on Friday.

Financials: Wells Fargo

This large-cap bank is perhaps the best solid value play in the sector for 2022. Wells Fargo & Co. (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.9 trillion in assets.

The company provides banking, insurance, investments, mortgage and consumer and commercial finance through 8,700 locations, 12,800 ATMs, the Internet and mobile banking. It also has offices in 36 countries to support customers who conduct business in the global economy. Wells Fargo serves one in three households in the United States.

Bloomberg reported that the Federal Reserve has privately signaled that it accepted the bank’s proposal for overhauling risk management and governance. The next steps to remove the asset cap include the completion of a third-party review and a full Fed board vote to lift the sanction.

The Wells Fargo dividend yield is 1.66%. BofA Securities has a $60 price target. The consensus target is $53.79, and the stock pulled back almost 5% on Friday to close at $47.95.

Health Care: CVS

This top stock gapped up in early November but has come back in and offers a much better entry point. CVS Health Corp. (NYSE: CVS) is one of the largest health care companies in the United States, providing retail, mail and specialty pharmacy dispensing services and pharmacy benefits. CVS has become one of the most vertically integrated publicly traded health care companies.

CVS serves employers, insurance companies, unions, government employee groups, health plans, prescription drug plans, Medicaid managed care plans, plans offered on public health insurance and private health insurance exchanges, other sponsors of health benefit plans and individuals. This segment operates retail specialty pharmacy stores and specialty mail order, mail order dispensing, and compounding pharmacies, as well as branches for infusion and enteral nutrition services.

CVS completed a $69 billion purchase of health care provider Aetna in November of 2018 and remains one of the top picks for 2022 and beyond, as CVS has become one of the most vertically integrated publicly traded health care companies, and health care has lagged the S&P 500 significantly this year.

Investors receive a 2.19% dividend. The $115 BofA Securities price target compares with a $110.08 consensus target and the most recent close at $100.36.

Industrials: Eaton

While perhaps less known than some of the other top picks, this is a solid buy for growth and income investors. Eaton Corp. (NYSE: ETN) operates as a power management company worldwide. Its Electrical Products segment offers electrical and industrial components, wiring devices and structural support systems, as well as residential, single-phase power quality, emergency lighting and fire detection, and circuit protection and lighting products.

The company’s Electrical Systems and Services segment provides power distribution and assemblies, three-phase power quality products, hazardous duty electrical equipment, explosion-proof instrumentation, utility power distribution equipment, power reliability equipment and services.

Eaton’s Hydraulics segment offers power, controls and sensing and fluid conveyance products, as well as filtration systems solutions, industrial drum and disc brakes and golf grips. The company’s Aerospace segment provides hydraulic power generation and fuel systems, controls and sensing, and fluid and conveyance products for commercial and military use.

Investors receive a 1.84% dividend. The price target at BofA Securities is $205. The $181.35 consensus target is closer to Friday’s $165.07 close.

Information Technology: F5

This stock has had a strong run in 2021 and looks to continue the trend next year. F5 Networks Inc. (NASDAQ: FFIV) provides multi-cloud application security and delivery solutions for the security, performance and availability of network applications, servers and storage systems.

The company’s multi-cloud application security and delivery solutions enable its customers to develop, deploy, operate, secure and govern applications in any architecture, from on-premises to the public cloud.

F5 offers application security and delivery products, including BIG-IP appliances and VIPRION chassis and related software modules and software-only Virtual Editions; Local Traffic Manager and DNS Services; Advanced Firewall Manager and Policy Enforcement Manager that leverage the unique performance characteristics of its hardware and software architecture; Application Security Manager and Access Policy Manager; NGINX Plus and NGINX Controller; Shape Defense and Enterprise Defense; Secure Web Gateway, and Silverline DDoS and Application security offerings; and online fraud and abuse prevention solutions.

BofA Securities has set a $285 price target. The $242.93 consensus compares with Friday’s final print of $233.