Whether you realize it or not, investors have witnessed history over the past two years. They've navigated their way through the quickest bear market decline of at least 30% (it took about a month), as well as the strongest bounce back rally on record. It took less than 17 months for the benchmark S&P 500 to double from its pandemic low.
There's little question that large-cap stocks (companies with market caps of $10 billion or above) have been responsible for the market's strength over the past 22 months, and that may continue throughout this year. Even with the Federal Reserve set to shift its stance on monetary policy, the following five large-cap stocks all have the potential to make you richer in 2022.
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Meta Platforms
One of the smartest ways to make money in the stock market is by purchasing stakes in industry-leading companies. Meta Platforms (META 2.98%), the company formerly known as Facebook, certainly fits that description.
During the third quarter, Meta announced that 2.91 billion monthly active users (MAUs) visited Facebook, with another 670 million unique MAUs heading to Instagram and/or WhatsApp, which Meta also owns. This 3.58 billion MAUs represent more than half the adults on the planet. There simply isn't a social media platform that gives advertisers access to more eyeballs than what Meta can offer, which is precisely why the company has such incredible ad pricing power.
Meta Platforms is also enjoying tailwinds from its push into the metaverse -- the next iteration of the internet, which allows users to interact in a 3D virtual environment. Meta is well-positioned to become a leader in virtual reality with its Oculus devices. After investing $10 billion in metaverse-related projects last year, Meta plans to invest successively more in 2022 and beyond.
Meta Platforms is also, arguably, the cheapest of the FAANG stocks. It's still growing sales by 20% (or more) annually, yet is valued at a multiple of 23 times Wall Street's forward-year earnings consensus. That's a bargain for a dominant company like this.
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Visa
Another large-cap stock that can "charge" ahead for investors in 2022 and make them richer is payment processor Visa (V 0.65%).
Visa's practically unstoppable operating model is built atop its cyclical ties. This is to say that it performs very well when the U.S. and global economy are expanding, and it can struggle a bit when recessions strike and consumers/businesses don't spend as much. Even though recessions and contractions are a normal part of the economic cycle, they don't last very long. By comparison, periods of economic expansion are measured in years. Buying shares of Visa allows investors to take advantage of the natural expansion of U.S. and global spending over long periods of time.
To build on this point, Visa happens to be an excellent way to benefit from historically high inflation. With the latest U.S. inflation reading hitting 40-year highs, consumers and businesses will be forced to spend more to buy the same goods and services. Higher spending is a recipe for Visa's revenue and profits to climb.
Additionally, most global transactions are still being conducted with cash. There's a long-term opportunity for Visa to expand its payment-processing infrastructure organically and via acquisition into emerging markets.
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Salesforce
A third large-cap stock with clear-cut competitive advantages that can make you richer in 2022 is Salesforce.com (CRM 1.05%).
Salesforce is a provider of cloud-based customer relationship management (CRM) software solutions. CRM software is used by consumer-facing businesses to enhance existing relationships and generate additional sales. It does this by allowing businesses to handle product/service issues, oversee online marketing campaigns, and run predictive sales analyses, to name a few key functions. Global CRM software sales are expected to grow by a double-digit rate, annually, through at least mid-decade.
What Facebook is to social media, Salesforce is to CRM software. According to IDC, Salesforce accounted for nearly 24% of global CRM spend in the first half of 2021. That compares to the 19.4% share of No. 2 through No. 5 in CRM sales, combined! With more than four times the share of its next-closest competitor, Salesforce's dominance will be unmatched for a long time to come.
The company is making waves with earnings-accretive acquisitions, too. CEO Marc Benioff has overseen the purchases of MuleSoft, Tableau, and Slack Technologies, all of which have expanded the company's ecosystem and its appeal to small and medium-sized businesses.
With a sustained annual growth rate of 20% or higher, Salesforce looks like a no-brainer buy.
Image source: Pinterest.
If large-cap stocks looking to bounce back are more of your investing forte, social media platform Pinterest (PINS 0.89%) has all the tools needed to make you richer in 2022.
Wall Street's concern with Pinterest has to do with the company's sequential MAU decline in the second and third quarters (from 478 million MAUs in first-quarter 2021 to 444 million MAUs in third-quarter 2021). While a shrinking number of users would normally be concerning, what we're seeing from Pinterest's MAU count is simply a normalization of its user growth now that coronavirus vaccination rates have picked up and people are getting out of their homes more often.
The far more important figure for investors to focus on is Pinterest's incredible monetization of its user base. Even with total MAU growth of less than 1% in Q3 2021 from the previous year, Pinterest delivered international average revenue per user growth of 81%! Most of the company's user growth during the pandemic originated internationally. This figure tells us that advertisers are willing to pay a premium to get their message in front of Pinterest's users.
There's also an attractive value proposition with Pinterest. This is a company with 25% or higher expected sales growth in 2022 that's valued at less than 25 times Wall Street's consensus earnings forecast.
Image source: Getty Images.
Bank of America
Last, but not least, money-center giant Bank of America (BAC 1.70%) can make you a lot richer in 2022.
Just like Visa and other financial companies, bank stocks are cyclical. Though they struggle with higher loan delinquencies during periods of contraction, economic expansions last significantly longer. Patient investors who buy bank stocks for the long haul are often rewarded with above-average dividend yields and a solid return.
What makes Bank of America so intriguing in 2022 is the expectation of multiple interest rate hikes. No money-center bank is more interest-sensitive than BofA. Following its third-quarter earnings report, the company noted that a 100-basis-point parallel shift in the interest rate yield curve would increase its net interest income by an estimated $7.2 billion. As interest rates rise, Bank of America's extra income from variable-rate loans will effectively go straight to its bottom line.
Investors should be impressed with BofA's digital transformation as well. The company ended September with nearly 41 million customers banking digitally and 43% of all sales occurring online or via mobile app. Since digital transactions are substantially more cost-effective for Bank of America than in-person or phone-based interactions, the company has been able to consolidate some of its physical branches to lower its noninterest expenses.
