Growth vs. value investing is the dilemma of 2022.
It’s hard to make sense of all the headlines that are assailing investors in 2022. Is the negativity overdone, with the impacts of inflation and rising rates already baked into stocks? Or is this just the beginning phases of a long-term downturn that requires investors to get defensive? If you’re in the first camp, you may be looking for growth-oriented stocks poised to break out if and when things recover. If you’re in the second, then you may want solid value-oriented plays that offer a nice dividend as a hedge against additional declines. Whatever your perspective, the following list has something to offer via four top value stocks and four top growth stocks to consider right now.
Growth stock – Lantheus Holdings Inc. (ticker: LNTH)
If you haven’t yet heard about Lantheus holdings, then you may be surprised to learn that this health care stock has doubled in 2022 even as the rest of Wall Street has been in a tailspin. That includes a stunning 40% surge over just a day or two in February thanks to spectacular earnings. Specifically, in the fourth quarter of 2021 Lantheus saw revenue surge almost 40% and profits explode four times higher over the prior year. Growth that spectacular may not be sustainable in the long term for this diagnostics company, but with projections that FY2022 sales will double over the prior year and then settle into double-digit expansion in the years ahead, there’s clearly a lot of reasons to be optimistic about this midsized health play.
Value stock – Nutrien Ltd. (NTR)
The roughly $50 billion Nutrien is about as rock solid a company as you’ll find on Wall Street. It’s one of the largest dedicated agricultural companies on the planet, wholly focused on agricultural products and financial solutions for the farmers that needs these materials. NTR not only serves an essential part of the global economy by supporting food production, it dominates its niche and has the scale that makes it hard for others to compete. Small wonder that in this risk-off environment, NTR stock has held flat through the year even as other stocks have struggled in 2022. And while perhaps not the most attractive dividend payer among the value investments on this list, the 3.3% yield is above the roughly 1.6% paid by S&P 500 companies on average.
Growth stock — H&R Block Inc. (HRB)
You may not think that tax prep firm H&R Block is particularly growthy. But it jumped about 20% in a single session this spring after strong quarterly results and raised guidance for the full fiscal year. Some of that is because of a better-than-expected rebound when compared with pandemic-related lows for the company; folks who are broke and out of work typically don’t want to pay for tax prep. However, there is a more durable growth tail wind that includes aggressive share buybacks as well as consistently higher growth forecasts that show this isn’t just a rebound story. Shares are up more than 50% year to date and just hit a new 52-week high in July on anticipation of strong results going forward.
Value stock – AbbVie Inc. (ABBV)
AbbVie was spun out of Abbott Laboratories (ABT) about a decade ago to separate its branded biopharmaceutical business from lower margin products like consumer health brands such as Ensure nutrition drinks and Similac baby formula. Some investors were skeptical of that move, as one-time blockbusters like Humira are now up against patent expiration. But AbbVie has worked hard to maintain its product pipeline to replace current leaders. In fact, one industry analyst recently predicted ABBV would be the largest of all Big Pharma stocks as soon as 2028 thanks to its continued growth as others fall behind — so it’s clearly going nowhere. With shares up in 2022 despite a down market, a 3.7% dividend and a forward price-to-earnings ratio of 10, this is a stock that has proven to be a store of value in a risk-off environment.
Growth stock — McKesson Corp. (MCK)
A global leader in health care equipment, McKesson provides essentials to medical offices, surgery centers and hospitals. That includes generic and over-the-counter drugs, surgery tools and conventional bandages and syringes. Health care is a recession-proof industry that offers great stability, but MCK stock also proves there is a lot of growth here for companies that know how to deliver. Even as the broader stock market has been underwater, this $47 billion health company has seen shares rise about 30% in 2022 thanks to modest but consistent growth in the top and bottom line.
Value stock – Stellantis NV (STLA)
Formed in 2021 via a 50-50 merger between Fiat Chrysler Automobiles and the French PSA Group that owns Peugeot and other European brands, Stellantis is now a roughly $40 billion automaker that is right-sized for the future of electric vehicles. The reality is that many legacy brands are suffering amid the next wave of industry disruption, and STLA could represent the first in a wave of major consolidation to eliminate the old and make way for modern brands that fit 21st century transportation needs. The “merger of equals” avoided the bloated debt loads we see from transactions like a private equity buyout, and the negativity on Wall Street has sent shares down to a rock-bottom price-to-earnings ratio of less than 3 right now — with an 9% yield on top of that! The future is admittedly uncertain, but there is a lot of value in STLA stock all the same.
Growth stock — MercadoLibre Inc. (MELI)
Overseas e-commerce player MercadoLibre is often referred to as the Amazon.com Inc. (AMZN) of Latin America, which is an apt description. It operates a consumer-focused internet marketplace that dominates the most populous and lucrative regions in the area, including thriving city centers in Brazil and Argentina. It’s in the early stages of this growth, but it’s also branching out into other long-term technology solutions including mobile payments. The stock has slumped in 2022, however with projections of nearly 50% revenue growth this fiscal year and another 30% growth in fiscal year 2023 this could be an aggressive growth stock that ultimately delivers mammoth returns if things go well.
Value stock – Amcor PLC (AMCR)
Perhaps the most boring stock on this list, Amcor could be just what the doctor ordered if you’re worried about global growth prospects and want to hide out in a core value investment. Amcor is a packaging products company that produces both “flexibles” that include specialized pouches and films, and “rigids” that include bottles, cans and jars. A wide array of clients use its products across beverage, medical, personal care, and other industries to provide a diverse customer base. And while there may not be breakneck growth ahead, Amcor is incredibly stable and offers a 4% yield right now. And furthermore, that yield is expected to grow as AMCR is one of the vaunted dividend aristocrats on Wall Street that has increased its payouts at least once a year for 25 years running.
4 growth stocks, 4 value stocks to buy now:
— Growth stock – Lantheus Holdings Inc. (LNTH)
— Value stock – Nutrien Ltd. (NTR)
— Growth stock — H&R Block Inc. (HRB)
— Value stock – AbbVie Inc. (ABBV)
— Growth stock — McKesson Corp. (MCK)
— Value stock – Stellantis NV (STLA)
— Growth stock — MercadoLibre Inc. (MELI)
— Value stock – Amcor PLC (AMCR)
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Update 07/14/22: This story was previously published at an earlier date and has been updated with new information.