A popular US stock, but for good reason

The first is Amazon (NASDAQ:AMZN). Before people roll their eyes at such a generic choice, hear me out. I get that Amazon is one of the most popular stocks globally for investors. Yet there are good reasons for this. The share price might only be up 7% in the past year, but it’s provided a 4.5x return over five years.

The business is also still showing growth. In its Q3 filing, net sales were up 15% versus the same period last year. Even though operating income was lower, it still made $4.9bn for the quarter, quite a staggering amount.

With the scope of diversification in business operations and recent acquisitions, I think Amazon is well-placed for the future. Clearly, one risk is that Amazon grows to such a size with so many fingers in pies that it becomes less focused and efficient.

Dividend stars

With a lot of focus on the top US stocks posting share price gains, I could easily forget about some great income picks. For example, Exxon Mobil (NYSE:XOM). It has a dividend yield of 5.8%, with a share price gain of 46% over one year.

The oil and gas company is one of the largest in the sector and has a rich history over decades since the merger of Exxon and Mobil in 1999. This gives me confidence the business will continue to function in years to come, even during tough times. 

One risk is the projection for oil prices for 2022. If we do see tighter restrictions on travel, then fuel demand will fall. If supply stays the same, this will lower the oil price and negatively impact Exxon Mobil.

Another top US stock that pays dividends is Western Union. The dividend yield for one of the world’s largest international payment businesses is 5.3%. The share price is down 17% over the past year, which is one reason why the yield has moved higher.

The share price has fallen due to decreasing offline money transfers due to the pandemic. If restrictions on travel continue, this could be a risk with investing. However, the company is able to offset some of this via growth in digital payments instead. Further, as travel picks up again, the business should naturally see a rebound.

Allocating the cash

These three top US stocks are viable options for me to consider as a UK investor. With my £1,000, I’d split it equally between the them. However, I could also invest more in a particular stock if I had a high conviction. I think Western Union is the most undervalued stock of the trio, so could put more than 33% of my money in the stock.

Overall, they’re my top pics as we head into 2022.