BOSTON ( TheStreet) -- Apple ( AAPL), Marathon Oil ( MRO) and CBS ( CBS) made Bank of America/Merrill Lynch's list of top stocks for 2012 and may help investors beat the market next year by a wide margin.Bank of America/Merrill Lynch strategist Savita Subramanian compiled the firm's favorite stock ideas for 2012, plucking one name from each of the 10 sectors of the S&P 500. Subramanian says the stock picks align with Bank of America/Merrill Lynch's investment themes for the year ahead.
10. Xcel Energy ( XEL) Company Profile: Xcel Energy is a supplier of electric power and natural gas service in several U.S. states, including Colorado, Kansas, Michigan, Minnesota, New Mexico, North Dakota, Oklahoma, South Dakota and Texas. Sector Representation: Utilities Share Price: $26.06 (Dec. 5) Potential Upside: 7.4% based on a price target of $28 Investment Thesis: Analyst Steve Fleishman touts Xcel for the company's yield, earnings stability and dividend growth. He also likes the stock as it is one of the highest quality, lowest risk regulated utilities in his coverage universe. "We like XEL's strong rate-base wind program and multi-state utility model, and find the stock attractive post its equity overhang completion," Fleishman writes. "Investments in wind generation provide solid growth. Challenges will be translating these opportunities into
8. Union Pacific ( UNP) Company Profile: Union Pacific operates a railroad franchise that covers 23 states in the western U.S., extending as far east as Chicago and New Orleans. Sector Representation: Industrials Share Price: $105.30 (Dec. 5) Potential Upside: 12.1% based on a price target of $118 Investment Thesis: Analyst Ken Hoexter says that Union Pacific comes up under the firm's screens for yield and high quality. Specifically, he highlights Union Pacific as a solid investment opportunity in a slow-growth environment. "We continue to believe the rail group will improve service metrics and raise core rates," Hoexter writes. "Union Pacific has improved its operating ratio from the mid-80s to 70% most recently, which has led to sustained upper-teens earnings growth. Ongoing benefits look to be derived as it moves to reprice the approximately 12% of its business that has not re-priced since 2004."
6. CBS Corp. ( CBS) Company Profile: CBS is a media conglomerate with a focus on television broadcasting and film, publishing and Internet. CBS, Showtime Networks, CBS Studios, CNet, and CBS Radio are among the company's assets. Sector Representation: Consumer discretionary Share Price: $25.72 (Dec. 5) Potential Upside: 16.6% based on a price target of $30 Investment Thesis: Analyst Jessica Reif-Cohen says that media is her preferred industry in the consumer discretionary area, and that her focus on the theme of cash deployment makes CBS her top pick in the sector. "We believe that CBS will benefit from an improving earnings mix due to growing subscription based revenue streams, solid fundamentals across the board and support from an announced $1.5 billion share repurchase authorization," Reif-Cohen writes. "Strong ratings in a solid advertising market drove a strong 2011 upfront for CBS, format changes at radio have driven station outperformance and improving outdoor will benefit from the 2012 London Olympics."
4. Apple ( AAPL) Company Profile: Apple, the maker of consumer electronic devices like the iPhone, iPad and iMac, is one of the largest companies in the world. Sector Representation: Information technology Share Price: $395.01 (Dec. 5) Potential Upside: 30.4% based on a price target of $515 Investment Thesis: Like most tech analysts, Scott Craig favors Apple because of its high quality, the secular growth opportunity, and attractive valuation. "We remain positive on Apple's growth potential given its opportunity to gain market share in large addressable markets, especially in the PC and handset markets," Craig writes. "We find Apple's valuation compelling, particularly based on the upside potential from revenue and earnings growth in the Mac/PC and iPhone segments and from gross margins, which we think should more than outweigh the near-term slowdown in iPod units and consumer exposure."
2. Marathon Oil ( MRO) Company Profile: Marathon Oil is an independent upstream company. The company has international operations in exploration and production, oil sands mining and integrated gas. Sector Representation: Energy Share Price: $28.81 (Dec. 5) Potential Upside: 73.6% based on a price target of $50 Investment Thesis: Analyst Doug Leggate picks Marathon Oil out from his entire coverage universe because of the company's attractive valuation, high quality and yield. "We believe the recent announcement to separate the company into two separate units that focus on exploration and production and refining, will release value from the shares and demand a higher premium to the current share price," Leggate writes.