Three stocks I would invest in today for growth in 2022

As the end of the year draws near, many investors may be considering altering their portfolios. Dylan Hood is and looks at his top three picks for growth in 2022.

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2021 has been another year characterised by the pandemic. Some sectors have soared, while others have lagged behind. Overall, the FTSE 100 has climbed 9%, sitting at 7,170 at the time of writing. With 2022 on the horizon, I have picked out three stocks in different industries that I think could offer great growth throughout the year.

M&S (LSE: MKS)

The first stock I have chosen is UK retail and grocery firm M&S. Delivering a whopping 69% year-to-date return, the retail chain has proved a top FTSE 100 performer. There are a number of reasons I think the firm will continue to offer strong growth throughout 2022. Firstly, M&S has announced a series of great results throughout 2021, delivering £296m free cash flow for the year. Secondly, the firm has an improving online presence through its 50% stake in Ocado‘s retail operation. The pandemic has accelerated the shift to online spending, and M&S is well poised to capitalise on this throughout 2022. Finally, as I covered in another article the firm has many of the qualities of a great private equity (PE) investment. If a PE firm took over M&S, I think we could see some big share price growth, although I’m more interested in it for long-term returns as an independent business. It does still come with risks as its recovery isn’t guaranteed to last and retail is a tough market to operate in, but I’d consider buying it today.

NIO (LSE: NIO)

My second stock is electric car manufacturer NIO. Unlike M&S, the NIO share price has had a rough ride throughout 2021, falling 44% year-to-date. However, currently sitting at $29, I think this stock has the capacity to climb throughout 2022. Its growth has been very encouraging over the past year. Results published in November highlighted a 120% increase in deliveries year-on-year. Also, the firm is expected to release two new models at its ‘NIO Day’ event on 18 December. This could help push up the share price going into 2022. However, the business has been battling with the supply shortages caused by the pandemic. For example, in October the firm had to halt production, leading to a 65% decline in month-on-month vehicle production. This is a risk that could hold back the NIO share price throughout 2022. That being said, I think at current cheap prices, NIO could offer healthy growth in 2022. I own some shares already but may buy more.

Lloyds (LSE: LLOY)

The third stock I like the look and might buy for 2022 is Lloyds. Having delivered 27% year-to-date returns, the firm is in a good place moving into the New Year. I like the look of Lloyds partly because of its exciting growth plans announced by new chief Charlie Nunn. The refreshed strategy could enhance the firm’s position in some of the markets where it’s not strong, such as wealth management and investment banking. In addition to this, Lloyds is planning to become the UK’s largest private landlord through its newest venture, Citra Living. If these plans come to fruition during 2022 then I think we could see some healthy growth in the Lloyds share price. One risk however is the threat the Omicron variant may pose to the UK economy. If more lockdowns occur, it could dampen the growth of Lloyds’ business ventures.

RISK WARNING: 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. The Motley Fool believes in building wealth through long-term investing and so we do not promote or encourage high-risk activities including day trading, CFDs, spread betting, cryptocurrencies, and forex. Where we promote an affiliate partner’s brokerage products, these are focused on the trading of readily releasable securities.

Dylan Hood owns shares of NIO. 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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