It makes sense if you haven’t been thinking much about Christmas stocks. You really can’t be blamed for not being in the Christmas spirit this year. The stock market’s challenging 2022 took a toll on a lot of portfolios, leaving many investors feeling more like a Grinch than looking for new stocks to buy.
But there’s a glimmer of hope on the horizon – think of it as Rudolph’s red nose, lighting the way for Santa to bring some better tidings for the holiday season.
After all, the Dow Jones Industrial Average has nearly clawed its way back to the black. It’s down only 5% on the year now, after spending much of 2022 flirting with bear territory. That’s progress.
And if you look toward the future you can see a chance for greater profits. After a weak year, many stocks are discounted heavily right now. Others – particularly energy stocks – are flying high and still have a long runway to bring in exaggerated returns.
So, grab some egg nog, pull your chair up to the fire and take a look at some Christmas stocks to buy. Each of these have an “A” rating in my Portfolio Grader. And the stocks are so good, I happen to hold a long position in every single one.
Occidental Petroleum (OXY)
Not surprisingly, an energy stock kicks off our list. Occidental Petroleum (NYSE:OXY) is benefiting from higher energy costs brought on by Russia’s invasion of Ukraine and the resulting uncertainty for oil and natural gas production.
OXY stock is up a whopping 137% in 2022 and shows zero signs of slowing down, making it one of the Christmas stocks to buy for continued growth. The consensus price target of $77.50 indicates that Occidental has at least another 12% runway.
The company did have a minor misstep in its last earnings report, missing analysts’ estimates on earnings per share by 2 cents. The company topped revenue estimates handily, bringing in $9.5 billion versus expectations of $9.05 billion. But EPS was $2.44 when the Street expected $2.46.
That wasn’t enough to damage Occidental’s grade in the Portfolio Grader – my free tool that measures stocks by quantitative factors plus momentum, analyst sentiments, earnings performance and other factors and assigns a letter grade. OXY still has an “A” rating in the Portfolio Grader.
Exxon Mobil (XOM)
The sentiment that is driving OXY stock is having a similar impact on Exxon Mobil (NYSE:XOM). The mammoth energy company (it has a market capitalization of more than $450 billion), is up 81% in 2022. And that includes a 16% hike in just the last three months.
Citi analyst Alastair Syme raised the firm’s price target on XOM stock recently from $98 to $110, saying that even though energy stocks are at or near all-time highs, energy stocks still have room to run.
Exxon is working to keep the profits coming by reducing operating costs and then passing the savings on to investors via stock buybacks and dividends, making it one of the best dividend Christmas stocks to buy. Third-quarter earnings were $112.07 billion, beating expectations of $104.76 billion. And EPS of $4.45 per share was better than expectations of $3.81 per share.
XOM stock continues to be a monster and has an “A” rating in the Portfolio Grader.
Devon Energy (DVN)
Devon Energy (NYSE:DVN) isn’t as big as Exxon, but this year many energy stocks also are Christmas stocks. DVN may not be as well-known. But it’s been a solid winner so far this year and there’s every reason to believe that will continue.
The Oklahoma-based oil and natural gas exploration company is up 55% so far this year. While oil and natural gas aren’t expected to return to their 2022 highs, the U.S. Energy Information Administration says prices will still be above levels seen in the late 2010s and early 2020s.
That will keep the dollars rolling in for Devon, which brought in $5.43 billion in revenue and $2.18 EPS in the third quarter. Analysts were expecting $4.79 billion in revenue of and EPS of $2.13.
On top of that, DVN provides an amazing dividend yield of 8%, giving investors yet another reason to buy and hold. DVN stock has an “A” rating in the Portfolio Grader.
Amgen (NASDAQ:AMGN) doesn’t have the mammoth dividend yield offered by Devon – it offers less than 3%. But it’s still one of the best dividend Christmas stocks you can buy. In fact, I recently identified Amgen as one of my best dividend stocks to buy for 2023.
The biotech company is a leader in providing treatment for some well-known and debilitating ailments, including bone cancer, psoriasis and rheumatoid arthritis. As long as it keeps that pipeline of medications rolling in through its R&D, Amgen stock will be a winner.
In September, it announced updated long-term positive data about the effectiveness of its Repatha drug that treats high cholesterol.
Q3 earnings included revenue of $6.65 billion and EPS of $4.70, both better than expectations of $6.55 billion and $4.45 EPS. That helps give AMGN stock an “A” rating in the Portfolio Grader.
T-Mobile US (TMUS)
I’ll be the first to confess my appreciation for 5G technology – and in turn, top 5G stocks. I think that 5G is a game-changing development because of how it will improve our everyday lives.
T-Mobile US (NASDAQ:TMUS) stock is up more than 30% so far this year and it’s beating the tar out of its biggest competitors. The company is rolling out its 5G network and growing its subscriber base – in Q3, it added 854,000 postpaid phone subscribers, beating expectations for 739,000.
In comparison, Verizon Communications (NYSE:VZ) added 8,000 in the quarter.
Revenue for the third quarter was slightly less than expected — $19.48 billion versus expectations of $19.98 billion. But the earnings per share was a huge beat, coming in at $2.27 while the Street expected only EPS of 50 cents.
TMUS is a stock to watch, and it has an “A” rating in the Portfolio Grader.
Petroleo Brasileiro (PBR)
Brazil-based Petroleo Brasileiro (NYSE:PBR) is in a unique spot. The company, known also as Petrobras, is facing some volatility because of the change in the president’s office.
The Brazilian government controls Petrobras, and outgoing President Jair Bolsonaro’s business plan for Petrobras could be shuttered on Jan. 1.
Incoming President Luiz Inacio Lula da Silva has said that Petrobras should invest beyond fossil fuels. His representatives also reportedly have asked Petrobras to suspend the planned sale of its Manaus refinery.
Shares are down by 12% in the last month, bringing the company’s year-to-date return to less than 3%. But that also means that PBR stock is significantly discounted and is in a prime position to provide some outsized returns next year.
Make no mistake – there’s a lot of money to be had with PBR. The company brought in $170 billion in revenue in the third quarter, beating expectations of $162.08 billion. And EPS of $3.56 was much better than expectations of $1.06 per share.
PBR is an intriguing stock right now, and has an “A” rating in the Portfolio Grader.
Lockheed Martin (LMT)
As one of the biggest and best-known defense contractors in the world, Lockheed Martin (NYSE:LMT) is seeing strong returns because of continuing geopolitical tensions in Ukraine, and between the U.S. and China, North Korea and Russia.
Just in the last two days, LMT won a $430 million Army contract and a $139 million Missile Defense Agency contract. And when you’re a defense contractor like Lockheed Martin, with a market cap of $126 billion, the contracts are going to keep rolling in fast and furious.
Lockheed Martin stock is up 36% so far this year, and it reaffirmed its outlook for the full year for revenue of $65.25 billion and EPS of $21.55.
LMT provides a dividend yield of 2.5%, and has an “A” rating in the Portfolio Grader.
On the date of publication, Louis Navellier had a long position in OXY, XOM, DVN, AMGN, TMUS, PBR and LMT. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.