5 best-performing S&P 500 stocks in the first half of 2022

Posted: 1 July 2022 12:02 pm
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These stocks have outperformed a seriously down market – but will they keep going? Plus, 3 other notable sectors that have been outpacing the broader market.

The S&P 500 is on track to close out the worst start to a year since 1962, according to US business news channel CNBC, but there are a few stocks which have bucked the trend so far.

While energy is the only sector in the green through the first half of 2022, there are plenty of individual stocks which have gone up as the broader market has gone down. Past performance isn’t a guide to future success and we’ve linked to a longer-term history of each stock where we mention it, for more context.

These are the best-performing S&P 500 stocks of the first half of 2022 as of 30 June, according to data from stock market research platform Finviz. Plus, 3 leading sectors beyond energy and their top performers.

1. Occidental Petroleum (OXY)

A Warren Buffett darling for 2022, Occidental Petroleum leads the best-performing S&P 500 stocks. Up 104% year to date, the excellent performance has been driven by higher oil prices, a solid first-quarter earnings report and, almost certainly, news that Buffett keeps increasing his stake in the Texas-based oil company.

Even with Occidental’s big run-up in the first half of 2022, its shares are currently trading around 31% below what some analysts expect it to reach.

For the full year, Wall Street expects Occidental to post $37 billion ($30.6 billion) in revenue, up 42% from the $26 billion reported in 2021. Importantly, the company is using its windfall from high commodity prices to repay debt and increase shareholder value. As another boost for investor confidence, Buffett spent about $529 million to scoop up another 9.6 million shares just 2 weeks ago when the stock pulled back in price, suggesting he sees value in the stock at its current price level and agrees with how the company is operating.

For a 5-year view of this share, see our dedicated guide.

2. Hess (HES)

Hess is another oil stock that’s been outperforming the broader market so far this year. Even though its run-up has slowed, the stock is still up an impressive 48% year to date, and some analysts think it’s still got significant room for growth.

The company announced in the first quarter new discoveries on the Stabroek Block – off-shore from the South American country of Guyana – and commenced production of its Liza Phase 2 development there. The company now estimates the block’s total output to stand at around 11 billion barrels of oil equivalent (BOE). Its Liza Phase 2 operation alone is expected to add $1 billion of net operating cash flow annually at a $65 Brent oil price.

Hess executives pointed out during the company’s earnings call in April that its portfolio break-even is forecast to decrease to a Brent oil price of approximately $45 per barrel by 2026, meaning crude oil prices above $45 would be purely profit.

Analysts on average estimate Hess will report revenues of $11 billion in 2022, up 45% from the $7.6 billion posted in 2021. They see the stock hitting $140.24 on average over the next 12 months, which represents a 30% upside from its current price.

For a 5-year view of this share, see our dedicated guide.

3. Coterra Energy (CTRA)

Texas-based oil exploration company Coterra Energy made some big strides in the first half of 2022, with its shares rising 45% since the turn of the year. The company, which operates in the Permian Basin, the Marcellus Shale and the Anadarko Basin, averaged 83.1 thousand barrels of oil per day (MBopd) in Q1 of 2022, exceeding the high-end of its guidance.

Considering the current environment, Coterra revised its free cash flow projection for 2022 to approximately $4.5 billion, up from around $3 billion. The outlook for oil and gas exploration and production companies is seen as mostly favourable for the foreseeable future, since oil prices aren’t expected to come down any time soon.

The stock has a $38.54 price target, which would spell a 47% upside from its current price if it’s reached.

For a 5-year view of this share, see our dedicated guide.

4. Valero Energy (VLRO)

Valero Energy is the largest global independent petroleum refiner and sits among the top S&P 500 performers so far this year with its 45% gain in share price. Its stellar first-quarter financials reported in late April drove shares of Valero to new all-time highs, though the stock has since retreated some as the energy sector cools off.

Valero blew past Wall Street’s first-quarter earnings and revenue estimates, posting $2.31 in earnings per share on $38.5 billion in revenue, compared to the $1.61 in earnings on $32.2 billion in revenue expected.

Overall refining capacity is down and demand remains strong, which benefits Valero. Some analysts are looking for revenue to top $171 billion in 2022, up 50% from the $114 billion reported in 2021. Shareholder earnings are also expected to increase significantly, climbing to $16.57 per share, compared to last year’s earnings of $2.27.

For a 5-year view of this share, see our dedicated guide.

5. Exxon Mobil (XOM)

Exxon Mobil has been another investor favourite so far this year, returning 44% over the past 6 months. The oil and gas company has been generating cash with oil prices soaring, adding $4.3 billion to its pile in the first quarter compared to the fourth quarter of 2021. Free cash flow in the quarter was approximately $11 billion, up 57% from $7 billion in the same quarter last year.

Excluding items, Exxon reported adjusted earnings of $8.8 billion, or $2.07 per share for the first quarter, up from $2.8 billion, or $0.65 per share, in last year’s same quarter. And oil prices are expected to stay elevated.

Wall Street expects Exxon to post 2022 revenues of $449.5 billion, up 57% from the $285.6 billion reported last year. Earnings for the year are expected to increase 93% to $10.39 per share, up from $5.39 per share in 2021.

For a 5-year view of this share, see our dedicated guide.

3 other notable sectors so far in 2022

While oil stocks dominate the list of the S&P 500’s 5 best-performing stocks in the first half of 2022, rising commodity prices and soaring inflation have lifted several stocks in other defensive sectors – sectors traditionally seen as refuges from recession and inflation.

Here are other leading sectors so far this year and a few strong performers in each.

1. Utilities

Income investors like utility stocks for their stability and strong dividends, and the sector typically ranks among the top picks for investors going on the defensive.

Here are some of the best-performing utility stocks so far this year from the S&P 500, according to Finviz data:

CompanyYear-to-date gainIndustry
Constellation Energy (CEG)+ 36.45%Utilities, Renewable
Sempra (SRE)+ 13.63%Utilities, Diversified
Consolidated Edison (ED)+ 11.02%Utilities, Regulated electric

2. Consumer staples

Soaring inflation has benefitted several stocks in the consumer staples sector, which includes food and drink, household goods and hygiene products and alcohol and tobacco. Many boast stable operations and steady dividends.

Here are 3 top performers in the consumer staples sector:

CompanyYear-to-date gainIndustry
Molson Coors Beverage (TAP)+ 19.44%Beverages, Brewers
Archer-Daniels-Midland (ADM)+ 14.28%Farm products
Lamb Weston (LW)+ 13.65%Packaged foods

3. Healthcare

Demand for healthcare is relatively immune to inflationary pressures, which makes the sector a top pick for many investors looking for some respite during these uncertain times.

Here are the 3 top performers in the healthcare sector so far in 2022:

CompanyYear-to-date gainIndustry
McKesson (MCK)+ 31.98%Medical distribution
Vertex Pharmaceuticals (VRTX)+ 27.66%Biotechnology
Bristol-Myers Squibb (BMY)+ 25.55%Drug manufacturers
This article offers general information about investing and the stock market, but should not be construed as personal investment advice. It has been provided without consideration of your personal circumstances or objectives. It should not be interpreted as an inducement, invitation or recommendation relating to any of the products listed or referred to. The value of investments can fall as well as rise, and you may get back less than you invested, so your capital is at risk. Past performance is no guarantee of future results. If you're not sure which investments are right for you, please get financial advice. The author holds no positions in any share mentioned.

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