3 Top Hot Stocks to Watch In February

There are just 19 trading days in February, but don't go thinking that there isn't a world of opportunity in the shortest month of the year. There aren't a lot of stocks trading higher in 2022 through Wednesday's close. Less than a quarter of the market is out of the red this young year, but a lot of those early winners can keep moving higher in the month ahead. 

B&G Foods (BGS 2.88%), Booking Holdings (BKNG 2.05%), and Dick's Sporting Goods (DKS 3.74%) are three consumer-facing stocks trading higher this year. They have the right ingredients to stay hot in February. Let's take a closer look.

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B&G Foods

With interest rates inevitably heading higher this year, it's just a matter of time before investors start rotating out of low-yielding investments to comparable companies packing a heartier payout punch. B&G Foods is one of the top-yielding food stocks with a 6.1% yield.

B&G Foods isn't a household name to most investors, but crack open a pantry or roll through the supermarket aisle and you will find its handiwork. B&G Foods is the company behind Ortega taco shells, Green Giant veggies, and more recently Crisco shortening. With more than 50 brands in its arsenal, you're probably a regular customer of B&G Foods, even if you don't realize it as you spoon into your Cream of Wheat on a wintry day.

B&G Foods doesn't offer much in terms of organic growth. It also fell short of Wall Street's profit targets for three straight months before merely matching expectations last time out. However, with a sustainable dividend given its forward earnings multiple of 15 and offering upside, as consumers expect food prices to keep inching higher this year, it's an early winner in 2022 that can deliver healthy total returns with its chunky quarterly dividend.

Booking Holdings

You wouldn't expect the world's leading online travel portal to be moving higher in the face of a global pandemic, but Booking Holdings is delivering positive gains for the fourth year in a row. Moving higher in 2019 was easy, but the parent company of Priceline, Booking.com, Kayak, and OpenTable also managed to climb 8% in 2020 as the travel and dining markets took a step back during the early days of the COVID-19 crisis. Gains continued in 2021 despite new pandemic waves and more travel uncertainty. Booking Holdings is now bucking the trend of the general growth stock sell-off in 2022. 

You have to like Booking Holdings' chances to add to this year's early gains. There is a lot of pent-up travel demand, and a lot of people have been hoarding the money that they didn't spend on trips over the past two years. The headwinds are still there, but there is no reason the pre-pandemic leader won't continue to be the top performer as we claw our way out. 

Dick's Sporting Goods

You shouldn't be surprised to learn that Dick's Sporting Goods was one of the few stocks that more than doubled last year. A lot of people have taken to playing sports outside as a way to stay active in the pandemic, and Dick's Sporting Goods is the industry leader. Revenue has soared 38% through the first nine months of fiscal 2021, and that's not the only income statement line where the retailer is scoring. 

Analysts can't seem to keep up with the improving margins at Dick's Sporting Goods. It's handily beating expectations on the bottom line. 

Data source: Yahoo! Finance.

The argument in favor of sporting goods stocks in the current climate is fairly obvious, but let's talk valuations. Despite more than doubling over the past year, Dick's Sporting Goods is trading for less than 10 times trailing earnings with a decent 1.5% yield. The year ahead may not be as lucrative, but analysts have been pushing their forward targets higher for the new fiscal year in recent months. B&G Foods, Booking Holdings, and Dick's Sporting Goods are playing to win.