When you’re talking about the best-performing stocks, for last year, it can be a tough call to make.
After all, it was one of the most remarkable stock market performances of recent years, surprising even seasoned investors who have already witnessed the dramatic recovery in 2020.
The S&P 500 index increased over 26.5% in 2021, making the year one of the best in the past three decades. However, not every member of the index was up or saw double-digit returns.
In fact, the best-performing stocks in the S&P 500 mostly include names from energy, financial services, semiconductors, consumer discretionary, cybersecurity and healthcare sectors.
In general, names that rally on fundamental reasons in a given year tend to perform well in subsequent quarters as well.
Thus, investors might want to keep these best-performing stocks on their radar with a view to buy the dips in share price. With that information, here are our 10 stocks for today:
- Church & Dwight (NYSE:CHD)
- Devon Energy (NYSE:DVN)
- Dover (NYSE:DOV)
- Eli Lilly (NYSE:LLY)
- Fortinet (NASDAQ:FTNT)
- Iron Mountain (NYSE:IRM)
- J M Smucker (NYSE:SJM)
- Kroger (NYSE:KR)
- Signature Bank (NASDAQ:SBNY)
- Wells Fargo (NYSE:WFC)
Best Performing Stocks: Church & Dwight (CHD)
52-week range: $77.62 – $104.39
Dividend Yield: 0.98%
Founded in 1846, Church & Dwight manufactures and distributes consumer household, personal care and specialty products. Its diversified and high-margin portfolio includes names like Arm & Hammer, OxiClean, First Response, Orajel, and WaterPik among others.
Like many other manufacturers of personal hygiene and household products, Church & Dwight has benefited from the momentum provided by the pandemic.
The company boasts a reliable track record of increasing cash flow and dividends. In addition to focusing on organic sales growth, management has been making acquisitions.
For instance, in late 2021, Church & Dwight announced the acquisition of TheraBreath, the second-largest brand in alcohol-free mouthwash.
CHD stock hovers at slightly above $100, up 22.5% over the past year. However, shares have a stretched valuation at 29.5 times forward earnings and 4.7 times trailing sales.
The 12-month median price forecast for Church & Dwight stock stands at $92.50. Therefore, some profit-taking could soon be in the cards.
Best Performing Stocks: Devon Energy (DVN)
52-week range: $15.39 – $49.75
Dividend Yield: 0.90%
Devon Energy focuses on oil and gas exploration, production, and transportation in North America. As a result, its fortune depends heavily on energy prices.
In 2021, increasing crude oil prices contributed to significant revenue and earnings growth. Third-quarter revenue increased 225% year-over-year (YOY) to $3.5 billion. Free cash flow skyrocketed eightfold from the end of 2020, reaching a record $1.1 billion in Q3.
Analysts expect oil demand to recover to pre-pandemic levels later in 2022. As a result, energy prices will likely stay strong, providing tailwinds for sector names like DVN stock.
Investors have been paying attention to Devon shares also for its dividend policy. In 2021, management launched an industry-first fixed plus variable dividend payment.
Now it distributes around half of its excess cash via an extra dividend payment each quarter.
DVN has a price tag at around $48. It has skyrocketed close to 150% over the past 12 months. Shares have a reasonable valuation at 8.3 times forward earnings and 2.8 times trailing sales.
The 12-month median price forecast for Devon stock stands at $52. Interested readers could regard a potential decline toward $45 as an opportune entry point.
Best Performing Stocks: Dover (DOV)
52-week range: $115.88 – $184.04
Dividend Yield: 1.12%
Dover delivers consumable supplies, equipment, software, and support services. For instance, it sells pumps and other components to the energy sector.
For the third quarter, Dover’s revenue increased 15% YOY to $2 billion. Net earnings came in at $264 million, representing a 32% YOY increase. Wall Street was pleased with the results.
In recent quarters, management has been focusing more on high-growth businesses like electric vehicles (EVs) and renewable energy. For example, since 2019 Dover and ABB (NYSE:ABB) have been building EV-charging infrastructure in Europe.
Furthermore, Deveon recently announced two acquisitions, Acme Cryogenics and RegO. These additions should help the company enhance its presence in the cryogenic industrial gases end markets with strong growth prospects.
Currently, DOV stock changes hands for around $181, up almost 40% over the past 12 months. Shares are trading at 20.7 times forward earnings and 3.2 times trailing sales. The 12-month median price forecast for Dover stock stands at $198.
Best Performing Stocks: Eli Lilly (LLY)
52-week range: $177.44 – $283.90
Dividend Yield: 1.52%
Pharma giant Eli Lilly focuses on neuroscience, endocrinology, oncology, and immunology therapies.
For the third quarter, non-GAAP net income increased 37% YOY to $1.76 billion. Management anticipates surpassing $28 billion in sales for the current fiscal year, including $2.1 billion from its COVID-19 antibody treatment.
Wall Street has been keeping a close eye on Eli Lilly’s product launches and recent authorizations.
For example, in June 2021, its investigational antibody therapy donanemab received the Food and Drug Administration’s (FDA) Breakthrough Therapy designation for the treatment of Alzheimer’s disease. Later in August, the type 2 diabetes drug Jardiance got approved.
LLY stock hovers at around $260, up over 45% over the past year. But expected future growth is partially priced in the stock at 28.7 times forward earnings and 8 times trailing sales. The 12-month median price forecast for the shares stands at $300.
Best Performing Stocks: Fortinet (FTNT)
52-week range: $143.63 – $371.77
Cybersecurity group Fortinet offers security services for networks, cloud and mobile environments. Its products include firewalls, threat management appliances as well as the security platform, Security Fabric.
The global cybersecurity market will be valued at $403 billion by 2027 with a compound annual growth rate (CAGR) of 12.5%, according to the company.
Recent metrics suggest Fortinet has been getting a slice of that growth.
For the third quarter, total revenue increased 33% YOY to $867 million. Meanwhile, free cash flow soared 77% YOY to $330 million. Management is guiding 29% YOY revenue growth for the full fiscal year.
FTNT stock hovers at $335, up 115% over the past 12 months. However, from a fundamental valuation basis, shares are not necessarily cheap at 74 times forward earnings and 17.7 times trailing sales.
The 12-month median price forecast for Fortinet stock stands at $380. Interested readers could wait for a pullback to buy for the long-term.
Best Performing Stocks: Iron Mountain (IRM)
52-week range: $27.72 – $53.14
Dividend Yield: 5.30%
Iron Mountain provides record management services for more than 225,000 companies, including 95% of the Fortune 1,000 names.
Management has recently shifted its focus to higher-margin digital storage and data center businesses to fuel future growth. In fact, 35% of its revenue over the past year was derived from data management, digital solutions, and data centers.
Third-quarter revenue increased 9% YOY to $1.1 billion. Net income came in at $68 million, up from $39 million in the prior-year quarter. Investors have been pleased with these metrics.
Furthermore, IRM offers a generous 5.3% dividend yield, making it an attractive income stock for investors seeking high yields.
The stock hovers at $47.5, up 67% over the past 12 months. Forward P/E and P/S ratios are 35.8x and 3.2x, respectively. The 12-month median price forecast for Iron Mountain stock stands at $52.
Best Performing Stocks: J M Smucker (SJM)
52-week range: $110.53 – $144.89
Dividend Yield: 2.76%
J. M. Smucker manufactures food and beverage products. Its product range includes coffee, pet food, fruit spreads, frozen products, juices and beverages, and baking mixes and ingredients.
Among the well-known brands are Knott’s Berry Farm, Jif, Santa Cruz Organic, Folgers, Dunkin’, Smucker’s, Bick’s Pickle, Carnation, Eagle Brand, Five Roses, and Robin Hood.
In late October, the company released fiscal 2022 Q2 results. Net sales went up by $16.0 million, or 1%. Adjusted earnings per share (EPS) came in at $2.43, up 2%.
“We are pleased with our ability to increase our net sales and adjusted earnings per share expectations for the fiscal year despite increasing cost inflation and continued supply chain disruption,” CEO Mark Smucker said.
SJM stock recently hit a 52-week high of $144.89 on Jan. 10. Currently, SJM stock trades in $143 territory, up 24% over the past year.
Shares are trading at 15.5 times forward earnings and 1.8 times trailing sales. The 12-month median price forecast for Smucker stock stands at $136. Interested readers could wait for a dip in price before hitting the “buy” button.
Best Performing Stocks: Kroger (KR)
52-week range: $31.44 – $49.58
Dividend yield: 1.71%
Kroger operates more than 2,700 supermarkets in the U.S. Its brands include King Soopers, Fry’s, Smith’s, Ralphs and City Market.
Like many of its peers, Kroger has benefited from the pandemic-prompted sales and earnings surge. Revenue for the third quarter increased 7% YOY to $31.9 billion. Adjusted net income came in at $589 million, or 78 cents per diluted share.
Meanwhile, in light of supply chain disruptions, Kroger has been growing its logistics capabilities with a view to enhancing automation. Management hopes the end result will be increased efficiency for in-store sales as well as home deliveries.
KR stock hit a 52-week high of $49.58 on Jan. 10. Currently, KR hovers around $47 and change. It is up 56% over the past 12 months.
Shares still have a reasonable valuation at 13 times forward earnings and 0.25 times trailing sales. The 12-month median price forecast for Kroger stock stands at $47. Therefore, we’d wait for a short-term decline in price before buying KR stock.
Best Performing Stocks: Signature Bank (SBNY)
52-week range: $142.32 – $370.90
Dividend Yield: 0.64%
Signature Bank is a commercial bank that primarily focuses on privately owned businesses.
Innovative blockchain-based services aim to attract new customers to a traditional banking business that was already growing rapidly. Interest income for the recent quarter increased 15% YOY to $556 million.
SBNY stock is $360 per share, up more than 135% over the past year. Shares are priced at 18 times forward earnings and 9.3 times trailing sales. The 12-month median price forecast for Signature Bank stock stands at $387.
Best Performing Stocks: Wells Fargo (WFC)
52-week range: $29.68 – $56.06
Dividend Yield: 1.47%
Wells Fargo offers retail, commercial and corporate banking services. The bank reported a net income of $5.1 billion for the third quarter, up 59% YOY from $3.2 billion in the prior-year quarter.
In addition, Wells Fargo repurchased a whopping $5.3 billion of common stock during the quarter.
Analysts note that it is one of the most consumer-facing banks among big U.S. banks. Therefore, Wells Fargo is well-positioned to benefit from surging interest rates more than its peers.
Moreover, WFC stock could surge even higher if there is positive news about its asset cap on the regulatory front.
WFC currently hovers around $54 per share, up 65% over the past year. Forward P/E and P/S ratios stand at 13.8x and 2.8x. The 12-month median price forecast for Wells Fargo stock is $57.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.