As I'm writing this, the S&P 500 is down by more than 17% so far in 2022, and the tech-heavy Nasdaq Composite is down by a staggering 27% for the year. And to be fair, the only reason the major averages are even doing that well is that they are weighted indexes -- meaning that larger companies' share-price moves count for more -- and most mega-cap stocks have held up quite well. Many widely followed stocks are down 50%, 70%, or more from their recent highs.
Yet even in the midst of all that, some stocks have performed quite well in 2022 so far. These three have actually gone up since the beginning of the year, and I see reasons to believe all of them have more upside potential.
EPR Properties owns several ski resort properties. Image source: Getty Images.
Travel and leisure spending is strong
EPR Properties (EPR -0.03%) has produced total returns (including dividends) of more than 10% for its investors so far in 2022. If you aren't familiar, EPR is a real estate investment trust, or REIT, that invests in properties occupied by experiential businesses. These include movie theaters, eat-and-play attractions (TopGolf is a major tenant), ski resorts, and waterparks.
As you might imagine, experiential real estate wasn't exactly a great business to be in during much of the COVID-19 pandemic. But the resilience of EPR's portfolio has been impressive, to put it mildly. In the first quarter, it more than doubled its funds from operations (FFO -- the REIT equivalent to "earnings") compared with the same quarter last year. Plus, the company is starting to deploy capital to grow its portfolio, and with more than $1.3 billion in liquidity, it certainly has options. EPR is also a fantastic dividend stock. At current share prices, it offers a 6.5% yield, and it pays out its dividend in monthly installments.
Built to profit in tough times
It shouldn't be a big surprise that Berkshire Hathaway (BRK.A 1.18%) (BRK.B 1.30%) is up by 3% for the year. The conglomerate is built to hold up nicely in times like these, with a collection of resilient subsidiaries that do well in all economic climates and a $360 billion stock portfolio filled with mostly low-volatility companies.
In fact, Berkshire Hathaway is set up nicely to come out of this market slump in even better shape than it went into it. Warren Buffett and his team deployed more than $50 billion into the stock market in the first quarter, and with more than $100 billion in cash still on the company's balance sheet, they are likely to pick up even more bargain-priced investments in the near future.
Oil prices aren't likely to drop quickly
Chevron (CVX 1.54%) has been by far the best performer on this list in 2022, generating returns of 45% in less than five months. And if you've put gas in your car recently, you certainly understand why it has performed so well. But the stock could still have room to climb.
Sure, from a long-term perspective, renewable sources are going to supply a growing percentage of the energy we use. But there are two key points to keep in mind. First, world energy usage is expected to rise by about 50% by 2050, so even if the percentage of energy we get from fossil fuels declines over time, the actual amount of those fuels we use could still increase. Second, Chevron is getting ahead of the green energy transition with some major alternative energy moves, such as its pending acquisition of Renewable Energy Group (REGI).
Finally, the oil market is getting hit by a combination of elevated demand, constricted supply, refining capacity issues, and geopolitical headwinds. As much as it pains me to say it, I don't see gas prices dropping back down to cheap levels anytime soon. So Chevron's profits should stay elevated for the foreseeable future.
Buy for the long term
As a final thought, although all three of these stocks are up this year and I think they could still go higher, it's important to emphasize that I'm a fan of all three of these as long-term investments. Though they've performed well in this downturn, all three could become volatile in the short run. However, they are excellent businesses and I'm confident that even though they aren't "on sale," investors who add them to their portfolio at these levels will be glad they did.
