Wall Street is an almost continuous source of stock predictions as analysts scour the market for good ideas to give their clients. But this year has proven a challenge for even the best of them.

Consider Bank of America's top stock picks for each of the market's sectors at the outset of 2022. Of these 11 picks, seven are down but beating the returns of the S&P 500. Not bad. But only one -- ExxonMobil -- is higher for the year.

It's just a helpful reminder of how difficult it can be to pick good investments over a single year -- and especially during the difficult period that 2022 has proven to be. None of us knows the future, including yours truly.

Bank of America is back with its top ideas for 2023. Discount retailer Five Below (FIVE -1.62%) and rural lifestyle chain Tractor Supply Company (TSCO 0.18%) make the list. Here's why I believe these are great stock ideas for the coming year and beyond.

1. Five Below

As of the third quarter of 2022, Five Below had more than 1,300 locations, marketing products to teens and preteens. It gets its name from selling items for $5 or less, but this pricing strategy has evolved over time -- it now offers products over $5 in its Five Beyond store section, which shows surprising pricing power for this brick-and-mortar retail stock.

To be clear, I'm somewhat apprehensive about Five Below's prospects in 2023. All of its sales growth in 2022 has come from opening new stores -- same-store sales are down 4.1% year to date. And inflated costs are hurting profitability, with year-to-date operating income down 39%. Management expects modest improvements in these areas in 2023 but nothing spectacular.

I wouldn't be surprised if quarterly financial reports from Five Below in 2023 cause negative reactions from the market. Therefore, I think it could be a good idea to buy Five Below stock little by little next year by using a strategy called dollar-cost averaging, taking advantage of potential dips.

All of this said, I do still believe Five Below is a stock to buy in 2023 because of the company's long-term plan. Management dubbed its plan the "triple double" because it is aiming to triple its store base by 2030, and double its revenue and earnings per share (EPS) by 2025.

Tripling its store count and doubling its EPS are both reasonable goals for Five Below. Consider that the company opened 290 new stores in fiscal years 2020 and 2021, and is on pace for 150 new store openings this year -- a rapid pace suggesting large growth opportunities ahead. And the best part is that these stores have a payback period of less than one year, even with current profitability headwinds, meaning these new stores will have a compounding effect on Five Below's EPS in the long term. 

This is what I believe will drive Five Below stock higher eventually, even if returns in 2023 are a little bumpy.

2. Tractor Supply

I consider most of Tractor Supply's sales as non-discretionary -- a comforting thought if consumers make discretionary changes to their budgets in 2023 because of the economy. According to its annual filing in 2021, 47% of the retailer's sales are in the livestock and pet category, and another 3% of sales comes from the agriculture category. Consumers will still spend money to feed their animals and keep plants alive regardless of economic conditions. Moreover, 21% of sales is in the hardware, tools, and truck category, for which a strong non-discretionary argument can be made as well.

Rural areas are found throughout the country, and Tractor Supply has achieved sales growth by expanding to more than 2,000 locations, meeting consumers wherever they are. However, this growth isn't exactly why Tractor Supply stock has returned 400% over the past decade. Rather, stocks that beat the market tend to have outsize EPS growth

A company's EPS can grow in two ways. First, net income can increase when revenue rises and profit margins expand. Second, since it is a per-share metric, EPS will go up if the number of outstanding shares goes down. And fortunately for shareholders, both of these things are happening at Tractor Supply.

TSCO Revenue (TTM) Chart

Data by YCharts.

Long term, Tractor Supply should open new stores, see continued revenue and profit growth, and reduce its share count as it has done in the past. But there's another reason to like Tractor Supply stock in 2023: The company should pay you more than $3.68 per share in 2023 just for owning it.

That's right: Tractor Supply pays a dividend, and has for over a decade. It's paid out $3.68 per share in the past 12 months, but I expect more than that over the next 12 months. That's because Tractor Supply has raised its dividend for 12 consecutive years, meaning it's about halfway to Dividend Aristocrat status. And having come so far, I doubt management will let the streak end in 2023.

Predicting returns for Five Below and Tractor Supply in 2023 alone is just guesswork. But business fundamentals suggest good times in the years ahead for shareholders.