2 FTSE 100 stocks to buy for 2022

These blue-chip companies could be two of the best FTSE 100 shares to buy for growth in 2022, says this Fool, who would buy both.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Woman using laptop and working from home

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

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. 

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. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays and British Land Co. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Shot of a young Black woman doing some paperwork in a modern office
Investing Articles

With an 8% dividend yield, I think this undervalued FTSE stock is a no-brainer buy

With an impressive yield and good track record of payments, Mark David Hartley is considering adding this promising FTSE share…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

£9,500 in savings? Here’s how I’d try to turn that into £1,809 a month of passive income

Investing a relatively small amount into high-yielding stocks and reinvesting the dividends paid can generate significant passive income over time.

Read more »

Businesswoman analyses profitability of working company with digital virtual screen
Investing Articles

Dividend star Legal & General’s share price is still marked down, so should I buy more?

Legal & General’s share price looks very undervalued against its peers. But it pays an 8%+ dividend yield, and has…

Read more »

Investing Articles

Dividend shares: 1 FTSE 100 stock to consider buying for chunky shareholder income

This company’s ‘clean’ dividend record looks attractive to me and I’d consider buying some of the shares to hold long…

Read more »

Investing Articles

3 of my top FTSE 250 stocks to consider buying before April

Buying undervalued UK shares can be a great way to generate long-term wealth. Here, Royston Wild reveals a handful on…

Read more »

Ice cube tray filled with ice cubes and three loose ice cubes against dark wood.
Investing Articles

Just released: our 3 top income-focused stocks to buy before April [PREMIUM PICKS]

Our goal here is to highlight some of our past recommendations that we think are of particular interest today, due…

Read more »

Investing Articles

Is this the best chance to buy cheap FTSE 100 shares in a generation?

I want to buy shares when they're cheap, and sell... never, just keep taking the dividends. And the FTSE 100…

Read more »

Man putting his card into an ATM machine while his son sits in a stroller beside him.
Investing Articles

Could NatWest shares be 2024’s number one buy for passive income?

For those of us looking to earn some long-term passive income, how does NatWest's 7% dividend yield sound? It sounds…

Read more »