For investors, the first quarter of 2022 was one to forget. The start of a war in Ukraine, decades-high inflation, and the first interest hike since 2018 all cast a pall on stock market returns.
Indeed, the benchmark S&P 500 Index in the US fell 4.9% during the first three months of the year – posting its worst quarterly performance in two years.
Meanwhile, the tech-heavy Nasdaq ended the first quarter of 2022 even worse off as it declined 9.1%. So, with everything seemingly underwater, where can investors find investment ideas?
Well, fortunately long-term investors can ride out a few quarters, or even a few years, of volatility while still owning stocks that can do well over the medium and long term.
For that reason, here are five stocks that investors could consider buying and holding in April.
1. AbbVie
As investors should know, healthcare stocks provide a level of defensiveness in our portfolios. That’s why biopharm company AbbVie Inc (NYSE: ABBV) is such a solid option.
AbbVie, which owns Botox and Humira among other drugs, is a giant in the pharmaceuticals space. In the fourth quarter of 2021, AbbVie posted worldwide net revenues of US$14.88 billion, up 7.4% year-on-year.
Even better, gross margin was similarly robust with a GAAP gross margin of 71% in the fourth quarter. While its blockbuster drug Humira – used to treat rheumatoid arthritis – is set to see its patent expire in 2023, AbbVie has a strong pipeline of drugs that are set to come to market.
Finally, AbbVie is actually a Dividend Aristocrat given it was part of Abbott Laboratories (NYSE: ABT) before it was spun out in 2013. Since having been spun out, AbbVie has increased its dividend by more than 250%.
Today, based on AbbVie’s current share price of US$162, shares are yielding around 3.5%.
2. Intuit
Second is Intuit Inc (NASDAQ: INTU), a financial software and technology platform provider that counts TurboTax, Credit Karma and Mailchimp among its services.
The company has carved out a niche in servicing small- and medium-sized businesses’ financial software needs.
As a result, its earnings have been stellar. In its latest second-quarter fiscal year (FY) 2022 (for the three months ending 31 December 2021), Intuit saw revenue up 70% year-on-year to US$2.67 billion.
Excluding the recent Mailchimp acquisition and a full quarter of Credit Karma, the company still managed to post organic revenue growth of a robust 39% year-on-year.
The Mailchimp acquisition will help Intuit grow its international presence as well as make its platform even more attractive.
With a solid balance sheet and profitable business, Intuit also reported that it repurchased US$519 million worth of shares during the quarter and raised its dividend per share (DPS) to US$0.68, which was up 15% year-on-year.
3. CrowdStrike
My colleague, Billy, has recently written about the next stock; cybersecurity specialist CrowdStrike Holdings Inc (NASDAQ: CRWD).
With Russia’s invasion of Ukraine and the ongoing “information war” between the West and Russia, it’s clear that online security will continue to be in high demand.
What makes CrowdStrike stand out from the rest is its cloud-native, AI-powered platform that helps provide endpoint protection for devices from malicious threats.
This smart, and crucially scalable, model has allowed CrowdStrike to see its subscription customer count grow to 16,325 in its latest quarter, up 65% year-on-year (see below).
With a total addressable market (TAM) that management pegs at US$116 billion by 2025, CrowdStrike still has a long runway of growth ahead of it.
Source: CrowdStrike investor presentation, March 2022
4. Alexandria Real Estate Equities
For any investor, international exposure to REITs makes sense and that’s exactly what Alexandria Real Estate Equities Inc (NYSE: ARE) provides.
Alexandria occupies a very specific space in the real estate market in the US – that of life sciences and labspace.
Increasingly, healthcare and pharma firms are requiring more and more real estate as the demand to set up complex laboratories is only set to accelerate given higher investment in the space.
In fact, Alexandria has seen such phenomenal growth that it surpassed its own goal (set in 2017) to double annual rental revenue within five years, crossing that landmark in the third quarter of 2021.
With scale in the industry, at 67 million square feet, Alexandria is a specialist REIT. With rising inflation and pricing power in the sector, Alexandria shares are offering dividend investors a yield of 2.3% based on its latest share price of around US$201.
5. Clearway Energy
What the war in Ukraine has taught anybody is that energy security is critical. Clearway Energy Inc (NYSE: CWEN.A) is going to play a big part in the transition to a carbon-free global economy.
The firm is one of the largest renewable energy asset owners in the US, with over 5,000 megawatts (MW) of installed capacity in wind and solar generation projects.
With a strong parent in Global Infrastructure Partners, Clearway has a pipeline of over 10,000 MW of projects that it can tap into.
Having grown its dividend at a compound annual growth rate (CAGR) of 9.7% over the past eight years. With a current share price of just over US$33, Clearway Energy shares are offering investors a solid dividend yield of 4.2%.
Focus on the long-term trends
While the first quarter of this year has been a painful one for most investors, it’s important to remember that stock prices will eventually reflect the state of the business over the long term.
In that sense, it helps to diversify and own both growth stocks as well as dividend stocks.
If investors are looking for quality assets in April then AbbVie, Intuit, CrowdStrike, Alexandria Real Estate Equities and Clearway Energy could be just what they’re after.
Disclaimer: ProsperUs Head of Content & Investment Lead Tim Phillips owns shares in CrowdStrike Holdings Inc.
