Top 5 Blue Chip Stocks to Buy in 2022
7 min readIn this article, we discuss the top 5 blue-chip stocks to buy in 2022. If you want to read our comprehensive analysis of these blue-chip stocks, you can go directly to Top 10 Blue Chip Stocks to Buy in 2022.
5. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 71
Founded in 1870, Exxon Mobil Corporation (NYSE:XOM) is a Texas-based oil company that ranks next on our list of the best blue-chip stocks to buy in 2022. Energy prices are soaring since the Russian invasion of Ukraine, and as the second-largest oil company in the world, Exxon Mobil Corporation (NYSE:XOM) is expected to remain one of the most comfortable stocks for investors. The firm has grown its dividend payments for 38 years in a row and offers a healthy yield of 4.46% as of March 17.
Investors are eager on Exxon Mobil Corporation (NYSE:XOM) shares, with 71 hedge funds being bullish on the company shares in the fourth quarter, with a combined value of $5.38 billion. In comparison, 64 hedge funds held positions in Exxon Mobil Corporation (NYSE:XOM) in the third quarter. GQG Partners was the top shareholder in the Texas firm, holding 32.4 million shares worth $1.98 billion in the fourth quarter, signaling a 22% increase in holding over the preceding quarter.
On March 3, BMO Capital analyst Phillip Jungwirth kept a ‘Market Perform’ rating on Exxon Mobil Corporation (NYSE:XOM) shares and raised the price target to $86 from $73. Jungwirth noted that although the firm reaffirmed many of the same financial targets on their Investor Day, he sees the company well-positioned to drive further operating cost and capital efficiency gains. This and an ‘industry-leading pipeline of projects will contribute to strong earnings and cash flow growth, according to the BMO Capital analyst. As of March 18, shares of Exxon Mobil Corporation (NYSE:XOM) have surged 39.02% in the last 12 months, and 47.10% in the last 6 months.
In the fourth quarter of 2021, Exxon Mobil Corporation (NYSE:XOM) posted an EPS of $2.05, which exceeded consensus estimates by $0.11. Revenue for the quarter was recorded at $84.97 billion, beating analysts’ estimates by $6.24 billion and recording an increase of 82.56% year-on-year.
Investment firm Saturna Capital discussed Exxon Mobil Corporation (NYSE:XOM) in its Q4 2021 investor letter. The fund said:
“Few companies maintain their position at the top for more than a decade or two. One that did was Exxon, which appeared decennially from 1980 through 2010. In 2019 it was ranked 10th, but as of writing has dropped to 39th place.”
4. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 83
Pfizer Inc. (NYSE:PFE) has been in the limelight since it manufactured one of the earliest Covid-19 vaccines approved by the United States government. The firm made approximately $36 billion in vaccine sales alone in 2021 and has also seen its Paxlovid oral pill for Covid-19 approved by the FDA. Founded in 1849, Pfizer Inc. (NYSE:PFE) is behind a range of well-known pharmaceutical products and pays a solid dividend of 2.95% to shareholders as of March 18.
On March 17, the United Nations-backed Medicines Patent Pool (MPP) announced that 35 generic drug-making firms around the world will manufacture cheap versions of Pfizer Inc.’s (NYSE:PFE) Paxlovid oral pill, which will be supplied to 95 low-income countries across the globe, or roughly 53% of the world population.
Pfizer Inc. (NYSE:PFE) reported earnings per share of $1.08 for the fourth quarter, which beat consensus estimates by $0.21. Revenue for Q4 stood at $23.84 billion, which was up 104.02% year-on-year but fell below estimates by $362.61 million.
Out of all the hedge funds tracked by Insider Monkey, 83 reported holding positions in Pfizer Inc. (NYSE:PFE) during the fourth quarter, as compared to 74 hedge funds in the previous quarter. This shows increasing investor confidence in the drug-making firm.
ClearBridge Investments discussed many stocks in its Q1 2021 investor letter, and Pfizer Inc. (NYSE:PFE) was one of them. Here’s what the fund said:
“Our underweights in health care and staples contributed to relative performance during the period. As we continue to focus the portfolio on high-conviction ideas, we sold Pfizer in late 2020, in the health care sector.”
3. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 83
Johnson & Johnson (NYSE:JNJ) is a blue-chip stock that also counts as a dividend aristocrat, having increased its dividend payment for 59 consecutive years. Founded in 1886 and based in New Jersey, the firm offers healthcare and pharmaceutical products around the globe. As of March 18, its dividend yield stands at 2.40%.
BofA analyst Geoff Meacham reinstated coverage of Johnson & Johnson (NYSE:JNJ) on March 2 with a ‘Neutral’ rating and a $185 price target. He is positive about the firm’s near-term growth prospects, as well as its ‘safe haven’ status given the current macro and geopolitical environment.
In the fourth quarter, Johnson & Johnson (NYSE:JNJ) posted an EPS of $2.13, outperforming estimates by $0.01. Revenue for Q4 stood at $24.80 billion, an increase of 10.36% in comparison to the year-ago quarter, but below analysts’ estimates by $485.39 million.
83 hedge funds were bullish on Johnson & Johnson (NYSE:JNJ) at the end of the fourth quarter, with a combined value of $7.38 billion. Fundsmith LLP was the leading shareholder in Johnson & Johnson (NYSE:JNJ) during the fourth quarter, holding 7.21 million shares worth $1.23 billion.
Here’s what Distillate Capital had to say about Johnson & Johnson (NYSE:JNJ) in its Q2 2021 investor letter:
“The largest additions in the rebalance, Johnson &
Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 262
Microsoft Corporation (NASDAQ:MSFT) offers computer hardware and software solutions around the globe. Out of the 924 elite hedge funds tracked by Insider Monkey in the fourth quarter of 2021, 262 hedge funds held stakes in Microsoft Corporation (NASDAQ:MSFT), with a combined worth of $75.66 billion. This shows improving investor confidence in Microsoft over the previous quarter, where 250 hedge funds had bullish bets on the company shares.
On February 8, Morgan Stanley analyst Keith Weiss maintained an ‘Overweight’ rating on Microsoft Corporation (NASDAQ:MSFT) stock, and set a price target of $372, noting that Microsoft shares remained a ‘strong buy at current levels’. As of March 18, Microsoft Corporation (NASDAQ:MSFT) shares have jumped 29.29% in the last 12 months, and 1.39% in the last 6 months.
Reporting its fourth quarter earnings on January 25, Microsoft Corporation (NASDAQ:MSFT) disclosed earnings per share of $2.48, which exceeded estimates by $0.16. $51.73 billion in quarterly revenue was an increase of 20.09% year-over-year, and $938.45 million above analysts’ forecasts.
Here is what Saturna Capital had to say about Microsoft Corporation (NASDAQ:MSFT) in its Q4 2021 investor letter:
“Only two companies remain from 2010’s top 10 list: Apple and Microsoft. Going back to 2000, only Microsoft remains. We expect that Microsoft Corporation (NASDAQ:MSFT) will maintain its position as the dominant global provider of personal and business software, while growing its cloud business and potentially being a key provider of augmented and mixed hardware and software.
US Technology companies have been the equity market’s biggest winners in recent years. Because of the Amana Income Fund’s objective of current income, many of these zero- or low-dividend companies do not suit the Fund’s mandate. One that does — Microsoft Corporation (NASDAQ:MSFT), which returned 46.03% for 2021 — was the Fund’s second biggest contributor to returns during the year. While Technology no doubt underpins much of the current economy and its future potential, Tech stocks have also benefited from low inflation, globalization, and valuations that are near historic highs. With globalization backsliding and inflation worries escalating, we believe companies in other industries with strong financial positions, competitive advantages, strong management, attractive dividend yields, and reasonable valuations can offer investors diversification in the context of equity markets increasingly concentrated in a handful of very large Technology firms.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 279
Amazon.com, Inc. (NASDAQ:AMZN) ranks first on our list of the best blue-chip stocks to buy in 2022, and hedge fund sentiment is a testament to the stock’s dependability and bullish trajectory. 279 hedge funds held positions in Amazon.com, Inc. (NASDAQ:AMZN) as of the end of the fourth quarter of 2021, the most of any stock tracked by Insider Monkey. In the quarter before, 242 hedge funds were bullish on the company shares.
On March 17, Amazon.com, Inc. (NASDAQ:AMZN) announced that it had closed an $8.5 billion deal to buy film studios MGM, which is behind popular hits including the James Bond franchise. The second-largest acquisition made by Amazon.com, Inc. (NASDAQ:AMZN) will add more than 4,000 film titles to its Prime Video streaming service.
Deutsche Bank analyst Lee Horowitz initiated coverage of Amazon.com, Inc. (NASDAQ:AMZN) with a Buy rating on March 10, and set a price target of $4,100. Horowitz believes that Amazon stock presents a highly compelling risk/reward at current levels, and that the market is under-appreciating potential upside associated with the firm’s retail revenue, multi-channel grocery share gains, and Amazon Web Services.
Amazon.com, Inc. (NASDAQ:AMZN) reported earnings per share of $27.75 in the fourth quarter, outperforming consensus estimates by $24.09. $137.41 billion in revenue for the fourth quarter was up 9.44% year-over-year but fell below analysts’ forecasts by $173.16 million.
Weitz Investment Management talked about Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2021 investor letter. The fund said:
“Several “platform” companies thrived during COVID and have been very strong stocks. In 2021, their businesses continued to thrive, though their stock prices cooled off. Amazon continues to steamroll the competition and grow rapidly, but its stock ended the year about where it began.”
You can also take a look at Top 15 Dividend Stocks With Upside Potential and 15 Biggest Petrochemical Companies In The World.
