A new financial year is soon upon us, and I am planning on my investments for the Stocks and Shares ISA for next year. Investing through such an ISA can be good because it allows me to avoid taxes on both capital gains and dividends. And it even gives me an investment allowance of £20,000 in a single financial year. I have plenty of FTSE 100 stocks on my investing wishlist, but three in particular stand out for me right now for 2022.
#1. Lloyds Bank’s much-awaited rally
The first of these is Lloyds Bank, which I have written about a lot in recent days. I think many things are going in favour of banks these days, which could lead to a rally in 2022. The most recent of these is the interest rate increase by the Bank of England recently, which could encourage commercial banks to increase their lending rates as well.
This, in turn, could improve their margins. The bank can also pay dividends at its own discretion, now that the central bank has removed restrictions on them, its recent performance has been fairly strong and a recovery is underway. At the same time, its share price is not back to its pre-pandemic levels.
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On the flip-side, its dividends are not back to pre-pandemic levels either and the recovery could slow down, due to the Omicron variant. But I reckon there is a higher possibility of the stock rallying than not. So I would buy.
#2. Ashtead is one of the best FTSE 100 stocks for me
Next, I like the industrial equipment rental company Ashtead. I always liked the stock, but as one that caters to the cyclical construction sector, among others, its performance has been particularly noteworthy recently. The company keeps going from strength to strength. In fact, its share price has risen so much over the last decade, that it completely obscures the increase in its dividends. As a result, its dividend yield is quite small, but the actual return on investment, if held for a few years, is quite high.
However, I am a bit wary considering there is now news the infrastructure bill might not go through in the US. Ashtead does much of its business in the US, so a strong source of potential growth could be lost now. But going by the company’s growth, even during tough times, I am quite encouraged to buy the FTSE 100 stock anyway.
#3. Segro could gain from long-term trends
Lastly, I like the warehousing real estate investment trust Segro. It has seen an impressive share price rise over the past years. But I think the best is yet to come. Online spending’s growth has accelerated sharply during the pandemic, increasing demand for all services across the e-commerce ecosystem, from warehouses to packaging materials. This FTSE 100 stocks finds itself in just the right industry. And its expansion continues and its results are good.
Of course, it is possible the pandemic-inspired spurt in e-commerce was a flash in the pan. That could cool considerably once Covid concerns are behind us. But somehow I do not think so. I’d buy the stock.
