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2 Safe Growth Stocks to Buy for 2022

By David Jagielski – Jan 6, 2022 at 6:45AM

Key Points

  • Abbott Laboratories and Meta Platforms can do well regardless of the current economic situation.
  • Abbott has benefitted from a rise in COVID-19 testing, but its sales would be up even without that boost.
  • Meta Platforms has seen its daily active user numbers rise both before the pandemic and during it.

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These two stocks have performed well in recent years and there's no reason to doubt they will continue growing.

This new year could be a volatile one. Between inflation, rising interest rates, and a new coronavirus variant to worry about, the path ahead is about as clear as mud. Trying to predict which stocks will be good buys for 2022 is no easy task. 

However, there are two growth stocks that look to be fairly safe bets to do well this year: Abbott Laboratories (ABT 0.68%) and Meta Platforms (META 2.47%). These industry giants don't lack growth opportunities and they can also offer investors plenty of security along with some strong long-term returns.

Two scientists reviewing a sample in a tube.

Image source: Getty Images.

1. Abbott Laboratories

Abbott Laboratories has benefited from a boost in sales due to COVID-19 testing since the start of the pandemic. Its rapid point-of-care test, BinaxNOW, has made it easy for health officials to stay on top of rising case numbers and for people to test themselves at home. And Abbott says that even for the new omicron variant, its tests "performed at equivalent sensitivity as other variants."

For an investor concerned about omicron, Abbott can be a great way to hedge against that risk. And even if someone is more optimistic that COVID-19 will go away and that the economy will return to normal this year, then Abbott can still prove to be a solid investment in 2022. The company's business did get a $1.9 billion boost in revenue for the third quarter (ended Sept. 30, 2021), bringing its top line up to $10.9 billion. However, even without the testing sales, Abbott still would have performed well as it generated growth across all of its reporting segments.

When excluding COVID-19 testing sales, its diagnostics segment still generated revenue growth of over 14.1%. Other areas of its business, including pharmaceuticals, medical devices, and nutrition, grew at rates of 15.1%, 14.6%, and 9.6%, respectively. And those are all areas that could rise in a return to normal where doctor's offices and hospitals are back to their normal operations.

Over the past decade, Abbott has proven to be a safe healthcare stock to hold, rising more than 416% during that time while the S&P 500 has increased by a more modest 281%. Even though Abbott has already outperformed the S&P 500 over the past 10 years it still has even more potential to continue outpacing it in the future.

2. Meta Platforms

Meta Platforms may be trying to bank on the emergence of the metaverse, but that's not why the stock is on this list. For now, the tech stock remains a great buy for its social media platforms that continue to drive significant traffic.

Proof of the company's resilience and stability is evident through the growth in its daily active users (DAUs). The company reported 1.9 billion DAUs for the period ended Sept. 30, 2021, a 19% increase from 1.6 billion just two years ago, before the pandemic. And during each one of those periods in between, DAUs steadily grew. Those numbers do not include Instagram or WhatsApp, demonstrating that even amid the Cambridge Analytica scandal and problems with preventing the spread of fake news, users have continued to flock to Facebook in recent years. 

Meta Platforms can be a good stock to buy for investors who are worried about COVID-19 and people being stuck at home. But even if the economy is fully reopened the stock could continue to fare well as Facebook users would be able to post selfies of all the places they can travel to again. Also, there's no real competition out there that Facebook faces, which is why it's such a safe investment for the foreseeable future.

Plus, the business makes tons of money. Its gross margin has been more than 80% of revenue in each of the past five years, and the company's net profit margin is regularly north of 30%. Meta Platforms has also generated $35.8 billion in free cash flow over the trailing 12 months. With that kind of money rolling in, the company is in an excellent position to acquire more businesses or pursue any growth opportunities that may come up in the future. 

It's almost been 10 years since this growth stock first went public, and since then, its shares have soared more than 785%. Investors can likely expect even more growth in the years to come.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. David Jagielski has no position in any of the stocks mentioned. The Motley Fool owns and recommends Meta Platforms, Inc. The Motley Fool has a disclosure policy.

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