As we near the end of 2022 -- a year that has seen major indexes and blue-chip stocks tumble -- investors may wonder what stocks are good plays for 2023. While there are no guarantees in the stock market, there are companies positioned to take advantage of the economic climate.
Here are two no-brainer buys for 2023.
Procter & Gamble
You'd be hard-pressed to walk into a store and not find a Procter & Gamble (PG +0.55%) product. Whether it's a convenience store, grocery store, or retail store, Procter & Gamble has its hand everywhere. As a consumer goods conglomerate, Procter & Gamble's portfolio of brands includes many household names: Tide, Bounty, Pampers, Tampax, Head & Shoulders, Gain, Crest, and many others.
NYSE: PG
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Procter & Gamble is a classic example of a defensive stock. These are companies with stable earnings, cash-filled balance sheets, and products that sell no matter the economic conditions. And this is what makes it a great buy for 2023.
While it seems inflation may have peaked, there's no guarantee that it'll drop significantly in 2023, which will undoubtedly affect how people spend money. It's easy to skip eating out or other forms of entertainment, but it's much harder to skip grooming, feminine care, baby care, cleaning, and the like. If nothing else, you can bet Procter & Gamble's products will sell.
Another plus is that Procter & Gamble is a Dividend King, having increased its yearly dividend for 66 consecutive years (and paid one for 132 years). Regardless of how the stock itself performs, investors can be confident they'll be receiving their quarterly dividend payments and be rewarded for buying and holding on to the stock.
Walmart
Walmart (WMT +0.41%) is one of the few non-Big Oil stocks that are up in 2022. The retail giant brought in over $152.8 billion in revenue in the third quarter of this year, up over 8.3% year over year. And there's no reason to believe this growth will slow down anytime soon. Walmart's "Save Money. Live Better" motto aptly describes the reason it's a great buy for 2023.
NASDAQ: WMT
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What separates Walmart from competitors like Target (NYSE: TGT) -- which is down over 32% year to date -- is not only its emphasis on targeting a more price-conscious consumer, but also its grocery sales. Groceries make up over half of Walmart's sales, and with food prices up 10.9% from this time last year, the store has seen more higher-earners gravitating toward it.
Since groceries make up such a large part of Walmart's sales, it's considered a consumer staple instead of consumer discretionary stock. Consumer staples sell items consumers need instead of want, putting Walmart in a prime position for 2023, given the economic climate. Consumer behavior is more likely to mirror this year instead of 2021, when personal consumption spending increased by 12.7% for the year.
As long as no supply chain issues plague the company, Walmart is set to have a fruitful 2023 despite the economic anxiety over a looming recession. People love low prices and need groceries, so Walmart and its stock are likely to benefit.
