Over the past couple of weeks, I have been looking for FTSE 100 stocks to buy for my portfolio in 2022. A couple of equities have appeared on my radar as top buys, both of which I would add to my portfolio right now.
Recovery shares to buy
The first company on my list is the FTSE 100 bank Barclays (LSE: BARC). I want to own some banks in my portfolio for the year ahead. I think there are two tailwinds that should help this sector outperform next year. Rising interest rates and the economic recovery may provide the perfect environment for lenders to grow earnings.
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I would buy Barclays over its other peers in the sector as the bank has more diversification. Its international investment bank helped it pull through the early stage of the pandemic as it was able to take hefty fees from clients looking to raise cash from investors.
This diversification could come in handy next year. If there is another wave of fundraisings, it could even be a third tailwind for the group.
Despite these growth factors, the stock looks cheap. Shares in the corporation are currently trading at a price-to-book value of around 0.6. Few other companies in the UK’s leading blue-chip index offer such potential for the year ahead while trading at such a depressed valuation.
Of course, it seems unlikely Barclays will be able to navigate the year ahead without dealing with some challenges. These could include further pandemic lockdowns and disruption to its business. Inflation may also prove to be a challenge for the enterprise to navigate.
FTSE 100 property champion
The latest retail footfall figures show that consumers are moving away from shopping in city centres. Instead, they favour buying online, out-of-town retail parks and the local high street.
These trends are good news for real estate investment trust (REIT) British Land (LSE: BLND). The company has been selling its commercial property assets in cities and reinvesting the proceeds in out-of-town parks. It has also been buying up property in the scientific and research sectors. These assets tend to be far more defensive than other types of property.
As well as these portfolio changes, the company is also benefiting from a general recovery in the overall commercial property market across the UK. Asset values are rising again after two years of stagnation.
These are the reasons why I would buy shares in the FTSE 100 company next year. As it pushes forward with its portfolio development plan, and property values rise, the market should begin to re-rate the stock. The shares are currently trading at a discount to net asset value, which I think is unwarranted.
Some challenges British Land could face next year include higher interest rates which will increase the cost of the group’s debt and may reduce profits.