I’m searching for the best FTSE 100 stocks to buy for my shares portfolio in 2022. Here are three great blue-chip UK shares I reckon will thrive even if broader economic conditions worsen.
The retail giant
Value retail has been one of the fastest-growing segments of the industry over the past decade. I think it could be in for particularly explosive growth in 2022 too, as inflation rockets in the UK. This is why I’d buy B&M European Value Retail (LSE: BME) for my shares portfolio.
I fully expect demand for its essential and discretionary goods to take off as shoppers try to stretch their shopping budgets further. The Institute of Fiscal Studies suggests that workers will require a 7% pay rise next year just to keep up with the twin threats of rising inflation and tax increases.
This might be wishful thinking should the economy continue to struggle. So I’d buy B&M despite the threat that current supply chain troubles might last well into next year.
Another value hero
I also think Associated British Foods (LSE: ABF) is a top FTSE 100 buy for 2022, and especially at current prices. City analysts think earnings here will rocket 74% year-on-year in the 12 months to next September. This leaves the retailer trading on a rock-bottom forward price-to-earnings growth (PEG) ratio of just 0.2.
The same pressure on consumers’ pursestrings that’ll likely boost B&M next year should also help trade at ABF’s budget Primark clothing division. But I wouldn’t just buy the business for the short-term. I expect earnings here to soar as it accelerates its store expansion plans across the US and Europe.
Last week, it announced plans to have 530 stores up and running in the next five years, up from below 400 at present. I’d buy ABF even though it operates in a highly-competitive sector.
A FTSE 100 dividend star
A raft of economic data suggests the post-Covid recovery is beginning to grind to a halt. In this environment, I think demand for safe-haven shares like utilities could rise strongly in 2022. This is why I’m considering adding United Utilities (LSE: UU) to my own stocks portfolio. As we’ve seen, firms like this can expect demand for their services to remain strong during good times and bad.
The threat of severe regulatory punishments and restrictions is always a problem for companies like United Utilities. Indeed, Ofwat slapped fines totalling £67m on a couple of water providers last week for missing performance targets. Still, it’s my opinion that the FTSE 100 firm’s essential service still makes it one of the best stress-free stocks to buy for 2022 and beyond.
I’m also attracted by United Utilities’ chubby dividend yields for the next year or so. These sit at 4% and 4.2% for the fiscal years to March 2021 and 2022 respectively. They beat the broader FTSE 100 average of 3.4% by a very-decent margin.