In this article, we will look at the 10 best-performing S&P 500 Stocks in 2022. If you want to explore similar stocks, you can also look at 5 Best-Performing S&P 500 Stocks in 2022.
Morgan Stanley Expects S&P 500 to Decline by 13% in 2022
On September 6, Morgan Stanley strategist Michael Wilson slashed his forecast for market earnings for 2022. Mr. Wilson noted that an economic slowdown is expected to impact equity markets more than rising inflation and aggressive Fed policies. Michael Wilson now expects earnings per share growth to contract by 3% in 2023, and this is without assuming a recession. Mr. Wilson said that Morgan Stanley expects to see significantly more negative EPS revisions in the back half of 2022 and into 2023 than the bank had “seen in the past several cycles”. Michael Wilson forecasted that the market is expected to bottom in the fourth quarter of 2022. Further, he expects the S&P 500 to fall to $3,400 in 2022, down 13% from its current levels, and in the event of a recession, Mr. Wilson expects the S&P 500 to fall to $3000 by year-end. As of September 15, 2022, the S&P 500 has lost 18.3% year to date.
Stifel Sees S&P 500 Finishing at $4,400 in 2022
On September 9, Stifel chief equity strategist Barry Bannister appeared on CNBC’s ‘Squawk on the Street’, where he discussed his market forecast for 2022 and why he sees the S&P 500 hitting $4,400 by the fourth quarter of 2022. Here are some comments from Mr. Bannister:
“We think the S&P 500 will end the year at $4,400. We do think, obviously a lot of that will be in the fourth quarter. So we have to get through this summer choppiness… Energy, food, goods, and services are how you make up inflation. Energy, food, and goods prices are going to come down very fast, all the leading indicators we have point to that. Services are topping out. So the question is, how much damage the Fed wants to do to the stock market when that inflation would have come down anyway. That’s really what the market is trying to determine…”
The stock market is in turmoil right now. While some analysts are bullish, others are equally bearish. Where should investors put their money? We have compiled a list of the 10 best-performing S&P 500 stocks in 2022 to help investors determine how they can sustain or potentially enhance their returns moving into the back half of 2022. Some of the best-performing S&P 500 Stocks in 2022 include Occidental Petroleum Corporation (NYSE:OXY), Enphase Energy, Inc. (NASDAQ:ENPH), and Marathon Oil Corporation (NYSE:MRO).
Photo by Roberto Júnior on Unsplash
Our Methodology
To determine the 10 best-performing S&P 500 Stocks in 2022, we looked at stocks that are constituents of the S&P 500 and reviewed their year-to-date returns as of September 15. We narrowed down our selection to companies that had the highest year-to-date returns. Along with each stock, we have mentioned the hedge fund sentiment, analyst ratings, and top shareholders. We have ranked our picks in increasing order of year-to-date returns.
10 Best-Performing S&P 500 Stocks in 2022
10. Marathon Petroleum Corporation (NYSE:MPC)
Year to Date Return as of September 15: 46.42%
Number of Hedge Fund Holders: 50
On August 2, Marathon Petroleum Corporation (NYSE:MPC) announced market-beating earnings for the second quarter of fiscal 2022. The company reported earnings per share of $10.61 and beat EPS estimates by $2.11. The company generated a revenue of $54.2 billion, up 81.8% year over year, and beat Wall Street consensus by $10 billion.
Wall Street is bullish on Marathon Petroleum Corporation (NYSE:MPC). On August 3, RBC Capital analyst TJ Schultz raised his price target on Marathon Petroleum Corporation (NYSE:MPC) to $121 from $110 and reiterated an Outperform rating on the shares. On August 16, Barclays analyst Theresa Chen raised her price target on Marathon Petroleum Corporation (NYSE:MPC) to $112 from $94 and maintained an Overweight rating on the shares.
At the close of Q2 2022, 50 hedge funds were long Marathon Petroleum Corporation (NYSE:MPC) and held stakes worth $2.72 billion in the company. This is compared to 43 positions in the previous quarter with stakes worth $2.51 billion. The hedge fund sentiment for the stock is positive.
As of June 30, Elliott Management owns more than 11 million shares of Marathon Petroleum Corporation (NYSE:MPC) and is the top shareholder in the company. The fund’s stakes are valued at $909.6 million.
Like Occidental Petroleum Corporation (NYSE:OXY), Enphase Energy, Inc. (NASDAQ:ENPH), and Marathon Oil Corporation (NYSE:MRO), Marathon Petroleum Corporation (NYSE:MPC) is among the best-performing S&P 500 stocks in 2022 and has gained 46.42% year to date, as of September 15.
9. Exxon Mobil Corporation (NYSE:XOM)
Year to Date Return as of September 15: 49.24%
Number of Hedge Fund Holders: 72
Shares of Exxon Mobil Corporation (NYSE:XOM) are surging. As of September 15, the stock has returned 49.24% to investors year to date. Wall Street sees upside to Exxon Mobil Corporation (NYSE:XOM). On September 6, Morgan Stanley analyst Devin McDermott raised his price target on Exxon Mobil Corporation (NYSE:XOM) to $113 from $107 and reiterated an Overweight rating on the shares.
On July 29, Exxon Mobil Corporation (NYSE:XOM) reported market-beating earnings for the fiscal second quarter of 2022. The oil giant generated a revenue of $115.6 billion, up 70.7% year over year, and outperformed market consensus by $3.6 billion. The company reported earnings per share of $4.14 and beat expectations by $0.29.
Exxon Mobil Corporation (NYSE:XOM) is currently trading cheaply relative to earnings. As of September 15, the stock is trading at a PE multiple of 10x and is offering a forward dividend yield of 3.60%, which the company backs with free cash flows of $49.2 billion.
At the close of the second quarter of 2022, 72 hedge funds held stakes in Exxon Mobil Corporation (NYSE:XOM) worth $7.40 billion. As of June 30, GQG Partners is the top shareholder in Exxon Mobil Corporation (NYSE:XOM) and has stakes worth $4.06 billion in the company.
Here is what First Eagle Investments had to say about Exxon Mobil Corporation (NYSE:XOM) in its second-quarter 2022 investor letter:
“Integrated oil and gas giant Exxon Mobil performed well in the second quarter as continued high prices for energy products supported the stock. As the largest refiner in the US, the company has benefitted from wide “crack spreads,” or the margin between the cost of crude oil and the petroleum products extracted from it. Exxon continues to invest in refining capacity in the US, which industrywide has been in steady decline since 2019. We are pleased that Exxon has been using its strong cash flows to reduce debt and to return cash to shareholders through dividends and stock repurchases.”
8. Devon Energy Corporation (NYSE:DVN)
Year to Date Return as of September 15: 52.47%
Number of Hedge Fund Holders: 57
On August 1, Devon Energy Corporation (NYSE:DVN) reported market-beating earnings for the second quarter of fiscal 2022. The company generated a revenue of $5.6 billion, up 132.7% year over year, and ahead of Wall Street expectations by $872.7 million. The company reported earnings per share of $2.59 and beat expectations by $0.22. Shares of Devon Energy Corporation (NYSE:DVN) have rallied 52.47% year to date, as of September 15.
Wall Street analysts are bullish on Devon Energy Corporation (NYSE:DVN). On August 17, Raymond James analyst John Freeman raised his price target on Devon Energy Corporation (NYSE:DVN) to $85 from $80 and reiterated a Strong Buy rating on the shares. On August 18, Mizuho analyst Vincent Lovaglio raised his price target on Devon Energy Corporation (NYSE:DVN) to $91 from $88 and maintained a Buy rating on the shares.
At the close of Q2 2022, 57 hedge funds were eager on Devon Energy Corporation (NYSE:DVN) and held stakes worth $1.48 billion in the company. As of June 30, GQG Partners owns 14.9 million shares of Devon Energy Corporation (NYSE:DVN) and is the largest investor in the company.
Here is what GoodHaven Capital Management had to say about Devon Energy Corporation (NYSE:DVN) in its second-quarter 2022 investor letter:
“Our biggest dollar gainer within this period was Devon Energy Corporation (NYSE:DVN), a position which emanated from a takeover in early 2021 of our long time holding WPX Energy. We are sitting on a material (unrealized) gain from our cost and are now receiving material dividends thanks to Devon’s thoughtful fixed/variable dividend policy. Energy is now a hot sector for investors but we have had a material exposure for a long time. We remember a bit too well $40 oil, NEGATIVELY PRICED front-month oil contract, and what it’s like to own a company with leverage and negative free cash flow during such periods. Our desire to have our biggest portfolio exposures be high return, growing, reasonably predictable and moderately levered companies lead us to reduce our Devon exposure in the past. When the recent facts and circumstances for the industry changed and appeared supportive of healthy oil prices, we decided to maintain a sizable holding and more recently added to the position. At Devon’s Q1 dividend rate, which is mostly variable in nature, the shares now yield approximately 10% and our yield on our average cost is materially higher. In addition, we maintain additional energy exposure through our long-term (and successful) holding in Hess Midstream and less directly through TerraVest and Berkshire Hathaway’s energy investments.”
7. ConocoPhillips (NYSE:COP)
Year to Date Return as of September 15: 56.65%
Number of Hedge Fund Holders: 71
On September 6, ConocoPhillips (NYSE:COP) announced a collaboration with Japanese utility giant, JERA, to develop a hydrogen gas project in the U.S., which will pave the way for cleaner electricity generation. As of September 15, ConocoPhillips (NYSE:COP) has gained 56.65% year to date.
As of September 15, the stock has a trailing twelve-month PE ratio of 9.53 and is offering a forward dividend yield of 1.71%, which the company supports with free cash flows of $15.65 billion.
On September 12, Piper Sandler analyst Ryan Todd raised his price target on ConocoPhillips (NYSE:COP) to $134 from $123 and reiterated a buy-side Overweight rating on the shares.
At the end of the second quarter of 2022, 71 hedge funds were eager on ConocoPhillips (NYSE:COP) and held stakes worth $2.42 billion in the company. This is compared to 67 hedge funds in the previous quarter with stakes worth $2.58 billion.
As of June 30, Fisher Asset Management is the largest shareholder in ConocoPhillips (NYSE:COP) with stakes worth $607 million. The investment covers 0.42% of Ken Fisher’s 13F portfolio.
Here is what Diamond Hill Capital had to say about ConocoPhillips (NYSE:COP) in its first-quarter 2022 investor letter:
“We redeployed capital into ConocoPhillips (NYSE:COP), which was trading at a discount to our estimate of intrinsic value and is well positioned over the long run due to its low-risk asset base.”
6. Coterra Energy Inc. (NYSE:CTRA)
Year to Date Return as of September 15: 57.23%
Number of Hedge Fund Holders: 40
Coterra Energy Inc. (NYSE:CTRA) is on the rise and is trading at bargain levels at the moment. As of September 15, Coterra Energy Inc. (NYSE:CTRA) has gained 57.23% year to date and is trading at a PE multiple of 7x. At the end of the second quarter of 2022, 40 hedge funds held stakes in Coterra Energy Inc. (NYSE:CTRA). The total value of these stakes amounted to $437.35 million.
Coterra Energy Inc. (NYSE:CTRA) is also offering a strong dividend payout and has abundant cash to support it. As of September 15, the stock is offering a forward dividend yield of 8.07% and has free cash flows of $2.2 billion.
On August 18, Mizuho analyst Vincent Lovaglio raised his price target on Coterra Energy Inc. (NYSE:CTRA) to $43 from $40 and reiterated a Buy rating on the shares. On August 31, Barclays analyst Jeanine Wai raised her price target on Coterra Energy Inc. (NYSE:CTRA) to $43 from $37 and maintained an Equal Weight rating on the shares.
As of June 30, Diamond Hill Capital owns more than 4.5 million shares of Coterra Energy Inc. (NYSE:CTRA) and is the top investor in the company. The fund’s stakes are valued at $116.4 million.
Here is what Diamond Hill Capital had to say about Coterra Energy Inc. (NYSE:CTRA) in its “Diamond Hill Long-Short Fund” first-quarter 2022 investor letter:
“Other top contributors in Q1 included energy exploration and production company Coterra Energy (NYSE:CTRA). The company benefited from increased energy demand as COVID-related economic restrictions eased in tandem with concerns regarding supply interruptions related to Russia’s invasion of Ukraine.”
Other S&P 500 stocks that are on the rise in 2022 include Occidental Petroleum Corporation (NYSE:OXY), Enphase Energy, Inc. (NASDAQ:ENPH), and Marathon Oil Corporation (NYSE:MRO).
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Disclosure. None. 10 Best-Performing S&P 500 Stocks in 2022 is originally published on Insider Monkey.
