The FTSE 100 index is studded with great stocks, in my view. Some of these companies have been around for over a century. Others have seen great growth in recent years. And then there are the ones that could well be the leading companies of tomorrow. But there are some that stand out even among all of the above. Here is one that I reckon could be among the best stocks for me to buy for 2022.
Gravity defying stock
I am talking about the building materials company CRH (LSE: CRH), which has shown pretty impressive performance despite the pandemic. Consider this. The company’s stock price crashed, like all other FTSE 100 stocks, on the fateful day of 23 March, 2020. All things considered, I would have expected a cyclical stock like CRH to be impacted for some time to come.
Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!
The lockdown brought almost all economic activity to a halt and put a cloud of uncertainty over how things might proceed. So, it was reasonable to assume that sectors linked closely with the economy would be most affected. And for most part, that was true. Banks, for instance, took their sweet time to start rising again as did travel stocks.
Despite being associated with construction, however, CRH was back to its pre-pandemic share price by as early as June 2020. And it has only risen since, except for a brief period in September this year. As I write today, it is hovering just below its recent one-year high. I have long been bullish on the stock and even though it might appear like bad timing, I bought it a few days ago.
CRH’s strong fundamentals
My reason for buying it now was this. The company’s share price does not come off often. And when it does, it does not stay down for very long. So now seems as a good time as any other to buy it. Also, when I look at its fundamentals, I am left with little doubt that it will continue to do well. It reported robust earnings for the first half of 2021. Its post-tax profits more than doubled from the same time last year.
Rising dividends for the FTSE 100 stock
And the company increased its interim dividend by 4.5% over last year. Its dividend yield is still quite low at around 2.3%, compared to the FTSE 100 average of 3.4%. But, over time it can add up. And I reckon that much like Ashtead, which I wrote about recently, it can be rewarding from the income generation perspective as well.
CRH’s outlook is positive as well. President Biden’s infrastructure plan in the US could bode well for it, considering that some 60% of its revenues come from there.
There are things that could go wrong of course. In another article I wrote today, I speculate about whether the stock market could crash in 2022. Rising inflation and a slow recovery could indeed derail the stock market, causing it to potentially crash. Another rise in coronavirus infection could also happen. But on balance, I am positive on CRH, which is why I bought it and could buy more in 2022.