Clearly, 2021 has been a banner year for stocks, with the S&P 500 up 25%. While things have been fairly easy by historical standards, with only a 5% drop so far, there’s a good chance 2022 will bring more difficult toboggan runs. The gradual reduction in the quantitative easing program, which aimed to keep interest rates low, begins this month, and some believe the Federal Reserve may be forced to raise interest rates earlier than expected in due to soaring inflation.

Given the potential for a more difficult 2022, BofA Securities equity strategists are focusing on the top three sectors to own for 2022. Energy is one of the biggest upside potentials. In a new research report, they claim that energy stocks will be solid choices in 2022 because they offer the highest yield of inflation-protected free cash flow among the S&P 500 sectors and are in fact a beneficiary. inflation.

In addition, energy stocks can increase when oil increases, whether this is driven by demand or supply. We sifted through the energy research universe of BofA Securities and found four Buy-rated stocks that pay exceptional and reliable dividends. While the top four stocks appear to be very solid ideas for 2022, and they are all rated Buy, it’s important to remember that no analyst report should be used as the sole basis for any decision to buy or sell. of sale.

Chevron

This integrated giant is a safer way for investors looking to stay or get long in the energy business, and it has great exposure to the Permian Basin. Chevron Corp. (NYSE: CVX) is a United States-based oil and gas company with global operations in exploration and production, refining and marketing, transportation, and petrochemicals.

The company has a strong dividend and has a strong position in the industry for both natural gas and liquefied natural gas. Some analysts estimate the company will have a compound annual growth rate of over 5% for the next five years.

With the majors’ strongest financial base, coupled with an attractive relative asset base, many on Wall Street believe Chevron offers the most directly positive risk / reward. While current conditions do not warrant a strong focus on production growth, Chevron has many mid-term drivers that are expected to support production levels in the years to come.

Analysts are confident that the 4.50% dividend will remain at current levels. BofA Securities has a target price of $ 135 on Chevron stock. This compares to a consensus goal of $ 128.15. The shares recently closed at $ 117.19 each.

ConocoPhillips

This is another large cap company that offers high value to investors. ConocoPhillips (NYSE: COP) explores, produces, transports and markets crude oil, bitumen, natural gas, liquefied natural gas and natural gas liquids around the world.