It's likely been a frustrating year for a lot of investors. Many tech stocks have been hammered, from megacaps like Meta Platforms (NASDAQ: META) and Amazon.com to work-from-home growth stock darlings like Zoom Video Communications and Peloton Interactive . Very few industries have avoided the market's whacking, with retail , real estate, and financials receiving beatdowns this year as well. Picking stocks lately hasn't been easy, to say the least.
But a lesson can be learned from two stocks that are beating the market this year by a significant margin -- and both stocks are in very different industries from each other. Those two stocks are none other than the boring and decades-old Waste Management (NYSE: WM) and McDonald's (NYSE: MCD) . While the S&P 500 index has fallen about 17% year to date, Waste Management stock is down just 5% and McDonald's shares are up 2% as of this writing. The two stocks are outperformers on both five- and 10-year time horizons as well. While there are many reasons for the market's bullishness for these two companies' shares, both have one thing in common: Their businesses are unlikely to be derailed or disrupted by weak macroeconomic environments or new competition.
If there's anything 2022 has taught us, it's that the market's appetite for a stock can decrease quickly if a company's future becomes less certain. Consider the sharp fall of Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp this year. Shares are likely down due to year-to-date earnings per share declining nearly 33% compared to the same period last year. Meta is grappling with a combination of reduced advertiser budgets amid macroeconomic uncertainty and the impact of changes to ad tracking and ad measurement in Apple 's mobile operating system. Such a sharp drop in earnings has investors reassessing the company's long-term earnings growth potential and the likelihood of various scenarios playing out.
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Why Waste Management and McDonald's Stocks Are Crushing the Market