- CNBC's Jim Cramer on Wednesday announced his 2022 outlook for the best-performing stocks in the Dow Jones Industrial Average last year.
- The "Mad Money" host said he expects UnitedHealth, McDonald's and Walgreens to help power the Dow higher in 2022.
"Of all the stocks I've covered so far this week, [the Dow winners] is the group that I think has the best chance of repeating its unbelievable performance even with the Fed being your foe, and it will be led by UnitedHealth, McDonald's and Walgreens," Cramer said.
Cramer said he believes Home Depot's 56% gain last year was fueled, in part, by investor optimism on the strength of the U.S. housing market. "The safest way to play housing isn't with a homebuilder, it's with a retailer that caters to both new building and renovation," Cramer said.
The Federal Reserve's benchmark interest rate can impact mortgage rates and, by extension, the housing market overall, Cramer said. "The slower the Fed tightens going forward, the more likely Home Depot will have another good year."
Microsoft is "firing on all cylinders," Cramer said, highlighting strong performance in its cloud unit, PC business and gaming that helped shares rise 51% in 2021. While the stock is no longer cheap, Cramer said he expects the tech giant to keep executing in 2022.
"Microsoft has become the biggest momentum stock in the world and I bet it will stay that way because it's got a habit of crushing the estimates," he said.
Even though Goldman Sachs shares jumped 45% in 2021, Cramer said the stock is still on a price-to-earnings basis.
"In short, while this is a very good brokerage and advisory firm, it gets no respect because people can't figure out why it doesn't do something more growth-oriented with its capital," Cramer said. "Management would tell you that it's got plenty of growth, but no growth stock sells for less than 10 times earnings."
Out of all the stocks highlighted in this list, Cramer said UnitedHealth Group is the one he believes is most likely to repeat its strong 2021 performance this year.
"Every time I see the stock rally, I get a little upset that we don't own it for the charitable trust, but we're just waiting for a dip. Unfortunately, UNH rarely gives you one, so maybe this is the year we just swallow our discipline and start buying," Cramer said.
Cisco shares advanced 41% in 2021, but Cramer said he still believes the computer networking company is a buy. He cited strong management and Cisco's solidifying position in the world of data centers and service providers.
"Its order growth is the best I've seen in ages, and orders are the best predictor of earnings in the business," he said.
"I like the fact that there's tremendous travel demand ... and is going to get better once [the Covid omicron variant] burns itself through because people want to go somewhere. If you think this decade will be the 'Roaring 20s' revisited, then American Express fits that theme perfectly," Cramer said.
Cramer stressed his oft-repeated view that investors should own Apple shares for the long-term, instead of trading in and out of the iPhone maker's stock, which advanced nearly 34% last year.
Walgreens is in a position to have another good year after advancing 30% in 2021, Cramer said. CEO Rosalind Brewer, who took over last year, has upgraded the company's management, he said, and the Covid pandemic provided the drugstore chain with some tailwinds.
Cramer said he believes McDonald's can replicate its 24% gain in 2021 again this year. "Although I like Chipotle more ... McDonald's is the more defensible and defensive name because it can triumph worldwide over any competitor," Cramer said.
His advice to investors is to "hold your nose and do some buying, even as it's already run" because the stock rarely has substantial pullbacks.
Sign up now for the CNBC Investing Club to follow Jim Cramer's every move in the market.