For many, 2022 has been a disaster from an investing perspective. The ageless Dow Jones Industrial Average, broad-based S&P 500, and growth-dependent Nasdaq Composite, have tumbled as much as 22%, 28%, and 38%, respectively, from their all-time highs. For those of you keeping score at home, it means all three indexes are, or were at one point, in a bear market.
However, the grimmest years on Wall Street often beget opportunity for patient investors. Since every bear market throughout history has eventually been recouped (and then some) by a bull market rally, the 2022 bear market represents the ideal time for long-term investors to pounce.
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Here's the best part: Most online brokerages have completely done away with commissions and minimum deposit requirements. This means any amount of money -- even $1,000 -- can be the perfect sum to put to work right now.
If you have $1,000 that won't be needed for emergencies or to cover bills, putting it to work in the following five sensational stocks can help you start 2023 with a bang.
Novavax
The first game-changing stock to buy to begin 2023 with a bang is one of the worst-performing healthcare stocks of 2022: Novavax (NVAX 3.42%). Multiple filing delays seeking Emergency Use Authorization for its COVID-19 vaccine, production delays, and a recent share offering and convertible debt issuance all haven't set well with investors. But with its market cap now below $900 million, there is plenty of reward with a reasonably low amount of risk.
Although we seem to have moved past the worst of the pandemic, initial series vaccines in emerging markets and booster shots in developed markets still represent a multibillion-dollar opportunity for Novavax and a handful of other vaccine developers.
NVX-CoV2373 (known as Nuvaxovid outside the U.S.) is one of only three COVID vaccines to reach the 90% vaccine efficacy (VE) level in clinical trials. What's more, it's a protein-based vaccine that relies on older technology to help a person's immune system recognize and fight the infection. This VE and differentiation should allow NVX-CoV2373 to remain a key player for years.
But the Novavax growth story is more about what's to come. With its drug-development platform now proven, the company is working on Omicron-specific coronavirus vaccines, combination vaccines targeting influenza and COVID, and a respiratory syncytial virus (RSV) vaccine. Expanding its product lineup and moving past near-term clinical trial expenses should result in revenue stabilization and a push toward recurring profitability.
If you need one more reason to trust in Novavax, consider that it ended September with $1.28 billion in cash and cash equivalents before its recent capital-raising endeavors. It's a financially sound company.
NextEra Energy
Another incredible stock you can buy with $1,000 to start 2023 on the right foot is electric utility NextEra Energy (NEE -1.03%).
Defensive stocks are a really smart way to hedge against the growing likelihood of a recession, or at the very least near-term instability in the economy and stock market. Since homeowners and renters don't change their electricity consumption habits from one year to the next, a major utility like NextEra can be counted on to deliver highly predictable cash flow every year.
But what really allows this company to stand out is its hefty investment in a green future. There isn't a utility that's generating more capacity from solar or wind power than NextEra Energy. While the cost to invest in these projects has been sizable, the company was able to lean on historically low interest rates for over a decade, as well as its operating cash flow, to make it happen.
The end result is lower electricity-generation costs and a compound annual growth rate of 8.4% over the past 15 years. That might not sound impressive, but the typical electric utility grows by a low single-digit percentage.
NextEra Energy is doing right by its shareholders, too. Aside from the fact that its shares have delivered a positive total return in 19 out of the past 20 years, management is looking to boost the company's dividend by around 10% annually through 2024.
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AstraZeneca
To further beat the drum on defensive stocks, pharmaceutical giant AstraZeneca (AZN 0.52%) makes for a sensational stock to buy with $1,000 to start 2023 off right.
From a macro perspective, people will still get sick -- however the global economy performs -- and will require prescription drugs, medical devices, and healthcare services. This provides a base level of demand for drug developers like AstraZeneca.
On a company-specific basis, two of AstraZeneca's core businesses are firing on all cylinders. Excluding currency movements, the company's oncology and cardiovascular drug segments have increased sales by 20% and 18%, respectively, through the first nine months of 2022.
The oncology segment has four drugs in blockbuster territory (over $1 billion in annual sales) with double-digit year-over-year sales growth.
And next-generation type 2 diabetes drug Farxiga has cleaned up with 58% constant-currency sales growth ($3.2 billion in total sales) through nine months.
AstraZeneca's acquisition of rare-disease drugmaker Alexion Pharmaceuticals last year is also paying dividends. Rare-disease therapeutics often have little competition and rarely face any list-price pushback from health insurers. Thanks to Alexion developing a next-gen treatment to its blockbuster drug Soliris, AstraZeneca can protect more than $4 billion in rare-disease drug sales from generic competition for a long time to come.
Innovative Industrial Properties
A fourth awe-inspiring stock you can put $1,000 in right now to kick off 2023 with a bang is cannabis-focused real estate investment trust (REIT) Innovative Industrial Properties (IIPR 0.52%), or IIP for short. IIP has a nearly 7% dividend yield!
Like pretty much all REITs, IIP's goal is to acquire assets that it can rent out for long periods. In this instance, it's acquiring medical marijuana cultivation and processing facilities in pot-legalized states. Since cannabis is a nondiscretionary good -- i.e., people continue to buy it, even if the U.S. economy weakens or inflation picks up -- IIP can count on strong demand for its facilities.
One of the more interesting benefits for Innovative Industrial Properties is that the lack of cannabis reform on Capitol Hill is helping the company. As long as marijuana remains illicit at the federal level, access to basic financial services for multi-state operators (MSOs) will be sparse. IIP uses its sale-leaseback program to acquire properties from cash-needy MSOs, then leases these properties back to the seller. It's an easy way for the company to land long-term tenants.
It should also be noted that Innovative Industrial Properties' portfolio of 111 properties have triple-net leases. These put the onus of all costs on the renter, including maintenance, utilities, insurance, and even property taxes. Although this usually leads to lower rental rates, it removes surprise costs from the equation for IIP.
Broadcom
The fifth and final sensational stock to buy with $1,000 to start 2023 off with a bang is semiconductor giant Broadcom (AVGO 3.55%), which just wrapped up its fiscal 2022, delivering 21% revenue growth to $33.2 billion.
Whereas most chipmakers have been clobbered by demand concerns or supply chain constraints, Broadcom has been successfully chugging along. The company should be a key beneficiary of 5G wireless upgrades. This first major improvement to wireless download speeds in about a decade will lead to a persistent device-replacement cycle through at least mid-decade. Broadcom brings in the bulk of its sales from wireless chips and accessories found in next-generation smartphones.
Then again, there's plenty of opportunity for Broadcom to thrive as technology takes hold in other parts of our everyday lives. For instance, it could see sustained double-digit sales growth from its automotive solutions segment. Likewise, demand for access and connectivity chips in data center servers should remain strong with businesses accelerating their push online and into the cloud in the wake of the pandemic.
Don't forget about Broadcom's backlog, either. Even though CEO Hock Tan wouldn't discuss the company's backlog during his latest quarterly conference call, the company entered its 2022 with a record $14.9 billion in orders. Even if the U.S. and global economies weaken, operating cash flow is buffered by its backlog.
The cherry on top is that Broadcom has grown its quarterly dividend by 6,471% -- from $0.07 to $4.60 -- over the past 12 years.
