The FTSE 100 index is littered with stocks that could boost my portfolio in 2022 and beyond. One tech stock I can’t ignore, and would add to my holdings is Avast (LSE:AVST). Here’s why.
FTSE 100 newbie
Avast operates in the lucrative and burgeoning cyber security market. It is known for its free antivirus software it offers to consumers for their personal use. It also offers paid complex bespoke security solutions for home and business users. Avast adopts cutting edge cloud-based and data-driven technology in its solutions.
I consider Avast a relative newbie to the FTSE 100. After all, it only listed on the London Stock Exchange in 2018. To be promoted to the premier index after such a short spell on the whole is impressive.
As I write, shares in Avast are trading for 604p. At time last year, the shares were trading for 523p, which is a 15% return over a 12-month period. The shares have surpassed 2020 market crash lows and are currently trading at all-time highs.
Drawbacks to investing
Competition in the tech market is fierce. Although Avast is a company with its own track record and history, it is perhaps not a well known brand, compared to some of its competitors. One name in the same market that pops into my head is Kaspersky. Brand recognition is extremely important. Avast could build this up in 2022 and beyond but it could offer competitive advantages here and now.
The Avast share price is currently trading at all-time highs. I am usually wary of this with FTSE 100 stocks when I am bullish on a stock. Is the growth priced in? Could there be a share price dip on the back of any news? I will keep an eye on developments.
Why I like Avast
I find it rare that when someone establishes a business, they are still very much hands on involved in the business nearly 25 years later. This is the case with Avast CEO Ondrej Vlcek. The firm has recently been taken over by competitor NortonLifeLock in a deal worth $8bn or so. This new ownership could catapult Avast to new heights with access to new customers and markets. One of the reasons I can’t ignore Avast is its performance and growth record. I understand past performance is not a guarantee of the future, however. I can see that revenue and operating profit have increased year on year for the past four years.
As well as Avast’s performance and new ownership, it also pays a dividend. This helps me make a passive income if I own shares. As I write, its dividend yield stands at 2%. This is just below the FTSE 100 average of 3%. In addition to this, the shares look good value with a price-to-earnings ratio of 29.
Overall I do believe Avast is a top tech stock on the FTSE 100. It has been taken over by a larger competitor but looks like it will operate as its own company. Avast has a good track record of performance and has carved its own corner in a lucrative market. I only see Avast moving on an upwards trajectory in 2022 and beyond which could offer me a lucrative return.