The FTSE 100 closed at 7,384 points on the last trading day of 2021, an approximate annual rise of 14%. Considering the lacklustre performance in 2020, such a substantial gain is quite impressive, in my opinion. This growth appears to stem from several businesses within the FTSE 100 that have managed to get back on track after the disruptions caused by the pandemic. And some of these look like they are only getting started.
I have previously discussed the 2 FTSE 100 stocks I’d buy and hold for the next decade. But since then, I’ve found another 3 FTSE 100 stocks that look even better for my portfolio.
The best asset manager of the FTSE 100?
Hargreaves Lansdown (LSE:HL) is a £6.4bn company that is considered UK’s number one platform for private investors. The asset management company’s operational capacity and footprint throughout the UK have led towards an additional 23,000 new clients in the three months ending 30 September last year.
Hargreaves Lansdown sees no roadblocks in its growth momentum. And with a client retention rate of 92.6%, I have to agree. As a result, the total assets under administration hit £138bn thanks to new business.
Unsurprisingly, Hargreaves Lansdown already has a massive portfolio of clients, diversifying its revenue stream. However, one potential risk is coming from other financial institutions popping up in the industry – many of which charge lower fees than this company. If the firm cannot retain or attract new customers in spite of these higher rates, then the group’s pricing power may become compromised.
Nevertheless, I believe this FTSE 100 stock has great potential ahead and would make a fine addition to my portfolio.
The UK’s discount retailer
The discount retailer B&M European Value Retail (LSE:BME) is a household name in the UK due to its simple, low-cost approach. It offers a wide variety of grocery and general merchandise categories at value prices.
Despite the Covid-19 restrictions, B&M successfully opened 25 new stores bringing the total to 681 across the UK. Also, B&M continues to reinvest in its operations to sustain and improve its customer experience. In this case, the retail group invested a whopping £22m in upgrading its existing store estate in the fiscal year 2021.
Despite all these progressions, the retail industry is drastically changing. Therefore, keeping up with the digital transformation and finding a suitable technological platform to maintain a customer base is a challenge that needs to be tackled seriously by the B&M management. At least, that’s what I think.
But so far the company has been able to give a 167% return to shareholders since June 2014. And I believe it can continue doing so moving forward. That’s why I think it’s one of the best FTSE 100 stocks to buy for my portfolio.
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FTSE 100 best auto marketplace
Auto Trader (LSE:AUTO) is an online marketplace for buying and selling cars. It has a listing of over 300 million vehicles.
The group is an outstanding growth stock, in my opinion. Its consumer engagement and retail numbers have reached record levels in its recent earnings report. Its growth is backed by excellent cash flow generation and a growing EPS. Moreover, in its recent half-year report, the company achieved the highest ever six-month revenue and profits.
Irrespective of the growth, I have to keep in mind that if the supply chains issue continues within the UK, car imports will decline. And that could have a significant short-term impact on the group’s revenue stream. But I think this is a risk worth taking for my portfolio.
Wrapping up
There are many new challenges faced by investors heading into 2022. Investors like me are seeking options that will help manage the challenges to the best. Therefore, I believe, these FTSE 100 stocks are the best options to invest my money in 2022 and beyond.
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Saima Naveed does not own shares in any of the companies mentioned. The Money Cog has published an investment report on Auto Trader Group. Views expressed on the companies, assets and strategies mentioned in this article are those of the writer and, therefore, may differ from the opinions of analysts in The Money Cog Premium services.
