As 2022 approaches, I am in the process of drawing up a list of stocks to buy for the next year. Since I like relatively low-risk stocks, I focus on FTSE 100 ones. Here are four such that I like, for different reasons. The only common denominator I see among these is that they appear to have a high likelihood of making gains in 2022.
#1. Anglo American: undervalued FTSE 100 stock
The first of these is Anglo American, the multi-commodity miner. It is a big diamond producer and also earns a significant part of its profits from iron. The downgraded outlook towards iron ore prices has been partly responsible for a plunge in its share price this year. While this could impact its earnings next year, I think its share price has overcorrected. Its price-to-earnings (P/E) is a ridiculously low seven times, even with a dividend yield of over 6%. I have already bought the stock, and intend to buy more of it soon.
#2. CRH: gravity defying
The next one, in alphabetical order, is the construction biggie CRH. The stock has done extremely well in the past year which is backed by the fact that its results are robust. Its prospects look good too. More than 60% of its revenues come from the US, which is growing fast anyway. And infrastructure is about to get a big government push, which could put the likes of CRH in a very sweet spot.
It has also increased its dividends recently, though its yield is still somewhat low at 2.3%. Another downside to it is that it is a bit price pricey, with a P/E at 26 times, higher than 20 times for the average FTSE 100 stock.
All in all though, I like the stock. I recently bought it and will buy more if it dips in December.
#3. Johnson Matthey: buy the FTSE 100 stock on dip
Next on the list is Johnson Matthey, the emissions control provider. The promising renewable energy stock recently plunged after it said that it was withdrawing from the production of materials used for electric vehicle batteries. The sudden U-turn has disappointed investors, which is understandable considering the fact that till recently it seemed to have ambitious plans for this market. It had started building a facility in Poland exclusively for the manufacture of these materials. I do not necessarily see this as a bad, though, if it keeps the company more financially healthy. I bought the stock on dip and could buy more in December if it falls more.
#4. Lloyds Bank: ready for growth
I was long wary of the Lloyds Bank stock because its share price had not gone anywhere in years. But now, I think even by its own challenged standards its share price is quite low. It has remained below its pre-pandemic level for a while now, even though banks are now free to set their own dividends. Its high dividend yield was a big draw for investors earlier in my view. As the UK economy recovers and interest rates rise, I reckon 2022 could be the year for the bank. It is one of the stocks I intend to buy soon.
Manika Premsingh own shares of Anglo American, CRH, and Johnson Matthey. The Motley Fool UK has recommended Lloyds Banking Group. 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.
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