2022 turned out to be a difficult year for the stock market, with notable drops in the major indices. For example, during those twelve months, the tech-heavy NASDAQ composite fell by a significant 33.1%, while the S&P500 fell by 19.4%, even after taking dividends into account. Numerous well-known issues, such as worries about inflation, growing interest rates, persistent recessionary fears and the ongoing geopolitical tensions between Russia and Ukraine, might be blamed for this dip on Wall Street. A “risk-off” mentality in the market caused a widespread sell-off of once-strong stocks as a result of these concerns coming together to frighten investors. Luckily, as the year drew to an end, this volatility offered investors enticing chances to purchase outstanding companies at deeply discounted rates.
U.S. News names ten equities to watch for the upcoming year every year. Taking into account dividends as well as overall returns, let’s evaluate these top 10 stocks for 2023’s performance so far –
1. APL or Apple Inc.; Apart from state-affiliated companies such as Saudi Aramco, Apple is the biggest publicly traded company in the world. The corporation had a difficult time in 2022 when its stock price saw an unexpected 26.4% decrease. Though the business has surpassed the $3 trillion market capitalization milestone and has recently experienced a fall after reaching record highs, Apple’s stock has made a tremendous comeback in 2023, rising by 34.7% as of September 13. The market’s apparent trust in Apple’s competitive advantage is demonstrated by the company’s around 29 price-to-earnings ratio. The brand-new virtual reality headset from Apple, the Vision Pro, retails for $3,499 dollars. Though early adoption may be narrow, investors expect similar technical improvements to become significant revenue generators alongside current product lines like the Mac and Apple Watch. Additionally, Apple revealed the iPhone 15 series, which boasts better cameras, a USB-C connector, and greater performance for mobile games.
2. The Bronx-based Dutch Bros, Inc.; A smaller but active player is the quickly growing coffee chain Dutch Bros, which is valued at more than $4.5 billion on the market. The company’s revenue increased by an astounding 48.4% in 2022. Dutch Bros maintained 754 locations in 14 states by the end of June, mostly in the Western and Southwestern regions. Its drive-thru retail layout, which minimizes expansion expenses, is anticipated to result in a significant 25% rise in the number of locations by 2022. The company saw a 3.8% gain in same-store sales and a 34% increase in revenue year over year in the second quarter of the year. With CEO Joth Ricci’s resignation on January 1, Christine Barone will take over as CEO. Following this revelation, the stock rose by almost 18% at first, but it has subsequently given back part of those gains.
3. Citizenship Inc. (C); With operations in both retail and investment banking, Citigroup is a global financial institution with a market value of over $83 billion. Citigroup’s two main selling points to investors are its value-oriented stock, which has a future price-to-earnings ratio of less than seven and a price-to-book ratio of 0.43; moreover, the company offers a strong 4.9% forward dividend yield, which acts as a safety net in the event of inflation and rising interest rates. It’s interesting to note that Berkshire Hathaway, led by Warren Buffett, has been amassing Citigroup stock; the company is reported to have $2.4 billion in holdings. As of September 13th, 2023, there had been a 3.3% decrease in Citigroup’s year performance.
4. Amazon.com Inc. (AMZN); The e-commerce behemoth Amazon had a difficult 2022, which caused its stock price to drop by 50%. Cost inflation, labor market restrictions, supply chain interruptions, and a drop in consumer confidence were some of the factors that contributed to this decline. Still, Amazon’s crown jewel, the wildly profitable cloud services segment known as Amazon Web Services (AWS), with an annual revenue run rate of more than $88.5 billion, remained strong. Comparing AWS’s estimated value at a similar valuation multiple to Microsoft’s cloud services, AWS is valued at $1.06 trillion. Investors may effectively purchase Amazon’s other significant activities, which generate $434 billion in revenues, for about $430 billion, considering the company’s market value of approximately $1.49 trillion. As of September 13, 2023, Amazon’s stock has increased by 72.4%, indicating a significant comeback.
5. Disney, Walt Disney Co.; Disney has a solid management team and is well-known for its iconic brands and content. After a fruitful career, CEO Bob Iger temporarily returned to supervise crucial acquisitions, such as Pixar, Marvel Entertainment, and Lucasfilm. Due mostly to one-time costs, Disney revealed an unexpected $460 million net deficit for the quarter that ended on July 1. Additionally, revenue growth just barely met projections. Disney’s stock experienced difficulties as a result of disagreements with Florida Governor Ron DeSantis and Charter Communications Inc. (CHTR) around carrier costs for the ESPN channel. The value of Disney’s stock had decreased by 3.9% as of September 13, 2023.
6. PYPL Holdings Inc.; The well-known financial business PayPal reported earnings per share of $4.13 in 2022, which is higher than data from 2018 and 2020, but the company is still trading below its pandemic lows from 2020. The stock fell significantly in 2022—by 62%—as a result of macroeconomic issues and the breakup of its profitable alliance with eBay Inc. Still, PayPal is trading at about 14 times expected earnings in 2023, which presents a tempting upside possibility. It is anticipated that agreements like Apple Pay and Amazon’s acquisition of PayPal-owned Venmo will increase the company’s footprint in both the traditional brick-and-mortar and e-commerce industries. Even after PayPal’s stock fell 11.8% on September 13, 2023, after Alex Chriss was named CEO, there is still hope.
7. EOG Technologies, Inc. (EOG); The American producer of oil and gas, EOG, produced a strong total return of 56.3% in 2022. Growth has slowed in 2023 as a result of a less volatile and inflationary environment, but EOG’s value proposition is still strong. The company has a low payout ratio of about 20% and a 2.5% dividend yield. Surpassing expert estimates, EOG’s earnings announcement for the quarter ended June 30 ignited a multi-week rise. By September 13, 2023, the price of EOG’s stock had risen by 5.6%.
8. Aeroportuario SAB de CV (ASR) Sureste; ASR, a Latin American airport operator, is doing well and generated a 17% total return in 2022, with a market price of $7.8 billion. Increases in passenger travel have somewhat countered Colombia’s decreases, particularly in Mexico and Puerto Rico. Airport managers make money through parking, landing fees, ground transportation, gate rentals, retail sales, and advertising, among other things. 5.2% tracking dividend yield is provided by ASR, and as of September 13th, 2023, its shares had yielded a total return of 12.1%.
9. Holding company Taiwan Semiconductor Manufacturing Co. Ltd. (TSM); With a $475 billion market valuation, Taiwan Semiconductor Manufacturing is a well-known sophisticated chip foundry that specializes in creating chips with a diameter of no more than seven nanometers. One of its many happy customers is Apple. Reduced demand in the electronics industry caused TSM to suffer its first profit decline in four years, despite the company reporting second-quarter profits and revenue that above expectations. TSM is currently trading at about 16 times anticipated earnings and yields a 2% dividend. As of September 13, 2023, the stock had increased by 23.6% overall. It began 2023 with notable increases but leveled off by mid-June, sitting near support levels in the low $90s.
10. DEO, or Diageo PLC; With a $90 billion market valuation, Diageo is a beverage corporation founded in the UK that serves the consumer defensive market, which is renowned for its ability to withstand difficult economic times. The business is a leader in its sector thanks to its portfolio of high-end brands, which includes Tanqueray, Guinness, Johnnie Walker, and others. Even though net sales increased by 21.4% in fiscal 2022, the stock had a 17.4% decline the year before due in part to its UK base and a difficult year for the British pound. Diageo is now trading below its forward P/E of 24.4, or roughly 19 times forward earnings, which is its five-year average. Another asset that Berkshire Hathaway now owns is Diageo. On September 13th, 2023, the price of Diageo’s shares had decreased by 8.7%.
To sum up, there has been a range in the performance of the top 10 stocks in 2023. Some people have recovered well from the problems of 2022, but there are still challenges for others. These companies are all attractive options for investors with varying risk tolerances and time horizons because of their distinct advantages and future potential.