The number 12 is tightly linked with December. It's the 12th month, of course. There are 12 days of Christmas, according to the traditional carol. Allow me to add one more connection with 12 to the list. Here are 12 top stocks to buy in December (listed alphabetically by category).
Energizers
Let's start off with a group I called the "energizers." These are stocks of companies that are in the energy sector and have solid prospects going into the new year.
1. Brookfield Renewable
The shift to renewable energy is arguably one of the most unstoppable trends around. Countries and companies across the world are scrambling to reduce their carbon emissions. That points to a bright future for Brookfield Renewable (BEP 0.55%) (BEPC 0.17%). The company currently operates hydroelectric, wind, solar, and distributed energy facilities with a combined capacity of 24 gigawatts. Brookfield Renewable's development pipeline capacity is more than 4 times greater.
2. Devon Energy
Devon Energy (DVN -0.96%) has been a big winner in 2022, soaring close to 60% year to date. The oil and gas producer should be able to perform well in 2023 as well with Devon likely to generate strong free cash flow. Even if the stock doesn't sizzle in the new year, investors can enjoy Devon's juicy dividend yield of 8%.
3. Enterprise Products Partners
Enterprise Products Partners (EPD -0.41%) stands out as another high-yield dividend stock that's practically a no-brainer pick. The midstream energy company offers a dividend yield of nearly 7.8%. Enterprise has increased its dividend for 24 consecutive years. And its fortunes don't depend on fuel prices. The company charges fees for transporting fuels and chemicals through its pipelines that aren't based on commodity prices at all.
4. Occidental Petroleum
Occidental Petroleum (OXY -0.12%) has been an especially big winner this year with its shares skyrocketing 140%. You can thank Warren Buffett for part of this impressive gain. Buffett has loaded up on Occidental stock for Berkshire Hathaway's portfolio. I think the Buffett effect will continue into 2023. Berkshire secured regulatory approval to acquire up to 50% of Occidental but currently owns only 21.4%.
Healthy picks
Whether or not a recession is on the way remains to be seen. But several healthcare stocks should be able to deliver solid gains no matter what happens.
5. Axsome Therapeutics
Axsome Therapeutics (AXSM -1.33%) stock has nearly doubled this year. Wall Street thinks it can go a lot higher. I agree. Axsome now has a potentially huge winner with major depressive disorder drug Auvelity on the market. It also expects to file for U.S. regulatory approvals in 2023 for AXS-07 in treating migraines and AXS-14 in treating fibromyalgia.
6. Novocure
Novocure (NVCR 1.49%) is another healthcare stock that could soon skyrocket. The company plans to announce results from a late-stage study evaluating its tumor treating fields (TTFields) therapy in treating non-small cell lung cancer in early 2023. Novocure also has data from three other late-stage studies of TTFields on the way over the next couple of years.
7. Vertex Pharmaceuticals
I view Vertex Pharmaceuticals (VRTX -1.08%) as a virtually unstoppable growth stock to buy and hold. The company has a monopoly in treating the underlying cause of cystic fibrosis. It should soon file for regulatory approvals of exa-cel in treating (to be more precise, curing) rare blood disorders sickle cell disease and beta thalassemia. Vertex's pipeline is also loaded with potential blockbuster therapies.
Tech and fintech
Sure, tech and fintech stocks have taken a beating in 2022. But the future should be brighter over the long run -- especially for these two stocks.
8. Alphabet
I think Alphabet (GOOG 0.02%) (GOOGL -0.04%) is the best FAANG stock to buy in December. The Google parent's moat remains strong. Its growth prospects look great, particularly with Google Cloud. Alphabet could also have some game changers in its "other bets" portfolio.
9. Mercadolibre
MercadoLibre (MELI -1.00%) stands out as a company whose stock performance hasn't reflected its underlying business strength in 2022. The Latin American e-commerce and fintech leader delivered 61% year-over-year revenue growth in its latest quarter. Look for MercadoLibre to rebound strongly once macroeconomic worries subside.
The REIT stuff
Some of the stocks already mentioned could appeal to income investors (namely, Devon and Enterprise Products Partners). However, there are also a few real estate investment trusts (REITs) that offer fantastic dividends and have solid long-term growth potential.
10. Digital Realty Trust
Digital Realty Trust (DLR 0.75%) is a data center REIT with a dividend yield of nearly 4.5%. CEO Bill Stein noted in the company's third-quarter earnings call that there are "powerful long-term secular demand trends, broadly driven by ongoing digital transformation and the growth in IT." He's right -- and that translates to great opportunities for this REIT going forward.
11. Easterly Government Properties
If you're looking for a super-safe business, Easterly Government Properties (DEA -1.39%) could be just the ticket. The REIT leases properties to U.S. government agencies. The risk of missed rents (one of the biggest threats to REITs) is practically nonexistent for Easterly. Investors should also like Easterly's dividend yield of more than 6.7%.
12. Medical Properties Trust
Last but not least, Medical Properties Trust (MPW -0.75%) is a healthcare REIT with a mouth-watering dividend yield of nearly 9.2%. The financial outlook for the hospital operators that lease MPT's properties should improve with higher reimbursements on the way. With its attractive dividend and valuation (shares trade at under seven times expected earnings), MPT looks like a great beaten-down stock to buy in December.
