By and large, 2021 has been a great year to own stocks and shares. In the US, the S&P 500 index has soared by more than a quarter (+26.5%) over the past 12 months. Meanwhile, in the UK, the FTSE 100 index lagged behind, yet still racked up a double-digit return. Since late December 2021, it has risen by 11.6% (both returns exclude cash dividends). But while some FTSE 100 stocks did handsomely this year, others crashed brutally.

FTSE 100 winners and losers in 2021

Of 100 stocks in the FTSE 100 index for at least a full year, 77 have risen in value. Gains at these 77 winners range from an impressive 74.5% to a mere 0.5%. Across all 77 gainers, the average return over one year was 24.2%. That’s more than double the wider index’s return. At the other end of the scale lie 23 FTSE 100 losers. Losses at these laggards range from just 0.6% to a horrible 26.8%. Across all 23 decliners, the average loss was 11% — a fall of similar magnitude to the index’s rise.

The Footsie’s biggest losers

Of the FTSE 100’s 23 losers over one year, eight have recorded double-digit losses, while five have lost 20% and more. Here are the Footsie’s five biggest losers over 12 months:

As you can see, losses at these five bombed-out FTSE 100 shares range from 21.7% to 26.8%. Thus, each of these stocks is in a bear market, having fallen 20%+. Across all five, the average loss is 23.3%, which is almost 35 percentage points below the Footsie’s return.

Why these five FTSE 100 stocks have bombed

The two mining stocks — Fresnillo and Polymetal International — have suffered in 2021 as prices of precious metals declined. The gold price is down about 5% over 12 months, while silver has lost around 13% of its value over one year. Meanwhile, London Stock Exchange Group had a tough 2021 following its acquisition of Refinitiv, a financial data and analytics platform. LSEG’s stock price has suffered due to the soaring costs of integrating this bold acquisition.

Flutter Entertainment owns nine leading gambling and betting brands, including PaddyPower, Betfair, FanDuel, FoxBet, Sky Betting and Gaming, and PokerStars. It operates in over 100 international markets, serving 14m customers and employing 14,000 staff. Yet its shares suffered this year due to adverse sporting results and Flutter’s withdrawal from several markets. Lastly, online supermarket Ocado Group has been the worst performer in the FTSE 100 over the past year. As its shares peaked in January, I warned that Ocado shares looked to me like a bubble waiting to burst. Since then, this growth stock has collapsed by 41.9%. Yikes.

Which losing stocks would I buy today?

As a veteran value investor, I’m always looking for shares that have been tossed into the market’s bargain bin. Right now, I’d be willing to take a punt on four of these five slumping stocks. I don’t own any of these FTSE 100 shares today, but I’d buy all five except for Ocado. After a decade of losses as a London-listed company, I’m yet to be convinced by Ocado’s growth model, although I could be wrong. But I see rebound potential in the other four beaten-up stocks. Hence, I would buy all four as recovery plays for 2022-23. However, I would expect all five share prices to remain volatile next year!

Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Fresnillo and Ocado 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.

I’ve picked out some of the best FTSE 100 stocks to buy for 2022. Here’s why I’d load up on them today.

#1: Vodafone

Vodafone Group faces significant competition in its core European market and its fast-growing African territory. But I think its lofty position in the highly-defensive telecommunications sector makes it a great buy as the economic recovery wobbles. In fact, I think it could receive a revenues boost if Covid-19 drags into next year and people use their mobiles to stay connected.

I think Vodafone is particularly attractive at current prices. The FTSE 100 firm trades on an undemanding forward P/E ratio of 12.8 times. However, its 6.9% dividend yield is what has really attracted my attention.

#2: United Utilities

I’d also buy United Utilities Group shares to bolster my investment portfolio in these uncertain times. Even if the Covid-19 crisis worsens and inflation keeps rocketing, Britons will still need the company’s water to shower, do the laundry, drink and more. This gives it the sort of earnings stability that many other UK shares would die for.

My main concern for United Utilities in 2022 is the prospect of multiple Bank of England rate hikes. This could push the cost of debt servicing much higher.

#3: Royal Mail

Royal Mail isn’t immune to Britain’s slowing economy. But I believe that at current prices it could still be too cheap for me to miss. The country’s oldest courier trades on a forward P/E ratio of below 8 times. Meanwhile it sports a jumbo 4.8% dividend yield. I believe the impact of Covid-19 on the retail landscape could benefit Royal Mail massively next year by turbocharging e-commerce activity and consequently parcels traffic.

I am wary, however, that the business is investing huge sums to capitalise fully on the online shopping boom. This has the potential to take a bite out of shareholder returns.

#4: Unilever

I’d expect Unilever to have a solid 2022, even though rising prices of key materials pose a huge risk. Studies show that demand for trusted consumer brands has ballooned during the pandemic. And this FTSE 100 firm has some of the best in the business like Domestos bleach, Dove soap and Persil washing powder.

Even if broader shopper spending power wanes, I’m confident beloved products like these can keep revenues moving higher. I’m also encouraged by Unilever’s robust position in the personal care and household goods markets, sectors that perform more resolutely when economic conditions worsen.

#5: B&M European Value Retail

Soaring inflation means that British shoppers will need to stretch their pennies out as far as they can. This bodes well for low-cost retailers like B&M European Value Retail in 2022. But this isn’t the only reason I’d buy this blue-chip today. I think its rapid store expansion plan will give profits an extra shot in the arm, even when inflationary pressures gradually subside. The business is aiming to have 950 B&M stores up and running eventually, up from just below 700 today.

I’d buy this FTSE 100 stock, even though supply chain problems could cause sustained pressure on profits.

Royston Wild owns Unilever. The Motley Fool UK has recommended B&M European Value and Unilever. 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.

There is no denying that 2021 has been a good year for FTSE 100 dividends. And 2022 might well be one as well, going by the fact that we have seen a fair bit of recovery so far. At the same time, I do believe that the macro-economic scenario has evolved a lot recently, which in turn could impact the level of dividends paid by some companies this year. 

FTSE 100 metal miners’ dividends

For instance, consider industrial metal miners. They have had the best dividend yields among all FTSE 100 stocks this year. Some of these have even been in double-digits. But are they likely to sustain these yields? That is a question worth me asking, because there is a big shift in the underlying reason for their generous payouts. The Chinese government’s policy stimulus pushed up demand for these metals, resulting in an unexpected bonanza for them. This in turn allowed them to increase their dividends. 

Their share price fortunes have altered since China decided to roll back the massive public spending as this has resulted in a dip in their stock prices. Yet temporarily at least, this has pushed up their dividend yields even further, because the dividend amounts have not changed. However, prices for industrial metals are expected to soften further in the next year, which means that these companies’ financials will probably not grow as well as they did recently. And that in turn could impact dividends. They are still good stocks, to be sure. But I would not buy them today for my portfolio solely based on their dividend yields, because I really cannot say how they will look in 2022. 

Is a housing market crash coming?

Similarly, I’d be cautious of FTSE 100 real estate stocks too. They too have seen significant buoyancy on account of the UK Government’s encouraging policies. However, the roll-back of the stamp duty holiday has led to speculation of a housing market crash, which could impact them quite a bit. I like these stocks for their long-term performance and even as recovery plays, but just to avoid disappointment, I would not buy them with just their dividends in mind for 2022.

FTSE 100 dividend stocks I’d buy now

However, there are some stocks that have more going for them than not, I feel. Among them are the oil biggies, which I think are looking at some really good times in 2022 if the Omicron variant does not sent the world reeling back into a long drawn out lockdown again. Their dividend yields are not among the highest, but I reckon that it is only a matter of time before they get much better. With the pivot towards clean energy, these might not be the best stocks to hold for the very long term, but for now they make good purchases in my view. That is why I have bought them. 

Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

With interest rates still at record lows, I’m looking for high-yield dividend shares to buy for my portfolio in 2022.

The three companies I’m looking at each offer an income of at least 7% — double the FTSE 100 average. They’re all stocks I’d be happy to buy today.

This turnaround looks too cheap to me

My first pick is City brokerage firm TP ICAP (LSE: TCAP). This business is the world’s largest interdealer broker. In simple terms, what this means is that its brokers negotiate complex financial trades between other dealers and investors.

Trading profits are affected by market conditions and the continued trend towards electronic trading. To address these challenges, TP ICAP has increased its electronic trading capabilities and expanded into areas such as energy trading and data analytics.

Profits have been inconsistent in recent years, but since 2018, earnings have been trending higher again. Broker forecasts suggest that profits (and the dividend) should continue to rise in 2022.

Investors are still wary about this stock, which has been in turnaround mode for some time. I’ve been following the story and I think tide is turning. In my view, TP ICAP shares may be too cheap for me to ignore.

Consensus forecasts suggest the stock will pay a dividend of 11.6p per share in 2022, giving an 8% dividend yield. I’d buy the shares for 2022.

A direct play on the UK economy

Property group AEW UK REIT (LSE: AEWU) owns a range of commercial property across the UK. Examples include warehouses, industrial units, offices, and retail parks. AEW specialises in smaller properties in locations where it’s able to upgrade buildings and increase future rental income.

AEW’s portfolio means that, in my view, it’s a direct play on the UK economy. This REIT‘s tenants are mostly small and mid-sized UK businesses, operating in domestic markets. Management policy is to pay a fixed dividend of 8p per share each year, which gives a dividend yield of 7% at current levels.

I’m attracted to this stock as an income buy. But there’s still a risk that Covid impacts could lead to a dividend cut. Falling occupancy is another risk — vacancy levels have risen slightly since late 2019.

This FTSE 100 dividend share yields 7.5%

My third choice is FTSE 100 insurance group Phoenix (LSE: PHNX). This little-known business specialises in life insurance and retirement products. Phoenix also recently acquired the Standard Life brand.

Insurance stocks are popular with income investors as they tend to generate plenty of cash for generous dividends. Phoenix is no exception. The company says it’s on target to generate £1.5bn-£1.6bn of surplus cash in 2021. Shareholders are expected to receive around £485m of this through a dividend of 48p per share.

Broker forecasts suggest Phoenix will deliver a similar performance in 2022, giving this stock a dividend yield of 7.5%. 

The main risk I can see is that the business will struggle to find new sources of growth. Most of the company’s income comes from mature policies. It’s not yet clear how successful Phoenix will be at attracting new customers with the Standard Life brand.

Despite this risk, Phoenix’s track record gives me confidence in the firm. I’d be happy to add this high-yield dividend share to my portfolio.

Roland Head has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

I’m searching for the best penny stocks for me to buy in 2022. I’ll forget about the prospect of making big returns only over the next 12 months. I think these cheap UK shares could make me brilliant profits over the next decade at least.

Different name, same great stock

I think earnings at Atlantic Lithium could soar over the next decade as the number of electric cars on the road increases. The business (which was known as IronRidge Resources up until late November) is developing the high-grade Ewoyya lithium project in Ghana. The product it specialises in is used in enormous quantities to make car batteries.

I like this particular early-stage miner because the development of Ewoyya is fully-funded thanks to a $100m+ cash injection from Piedmont Resources. Of course, cost overruns are not out of the question, nor are delays in getting maiden production from Ghana out of the ground. And this could have a disastrous impact upon the share price. But noises coming out of Atlantic Lithium are highly encouraging so far, including multiple drilling results released just this month.

Getting a slice of the gaming boom

I’m confident Gaming Realms could be a great way for me to exploit the mobile gaming boom. This UK tech share develops and licences casino games that are played on phones and tablet computers. It licences its content across Europe and the US and some of its heavyweight partners include betting companies like DraftKings, technology manufacturer Sony and broadcasting colossus ITV.

According to games industry researcher Newzoo, the mobile gaming market is worth $93.2bn in 2021. This was up 7.3% year-on-year and means that mobile game revenues make up 52% of the entire games market.

Gaming Realms’ products are popular and the business is best known for the Slingo slots-and-bingo mash-up titles. The business has a terrific pedigree of producing worldwide smashes and this provides me as an investor with a great deal of confidence. I’d buy Gaming Realms even though it’s not immune to competitive pressures. The mobile gaming market is highly competitive, after all.

A penny stock for the housing shortage

Britain’s chronic homes shortage means that housing construction should remain strong for years to come. Combined with the buoyant repair, maintenance and improvement market, I think things are looking extremely bright for Breedon Group. This penny stock sells a wide assortment of building products from bricks, tiles and concrete to aggregates.

Breedon’s now the largest independent supplier of construction materials in Britain following acquisitions in recent years. Pleasingly it remains committed to M&A to capitalise on its robust end markets too, helped by its impressive cash generation. I’d buy the business even though an acquisition-led strategy can throw up a host of problems. These can include unexpected problems and disappointing revenues through to a deal being blocked on competition grounds.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended ITV. 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.

Five years ago, IAG (LSE: IAG) shares appeared to be a fantastic investment. After years of struggling with high costs and low demand, the company finally seemed to be breaking out. Profits were rising, and the corporation was so optimistic it decided to hike its dividend by around 30% in 2016. 

Initially, growth continued with net profit rising from €1.5bn in 2015 to nearly €3bn by 2018. Then the coronavirus pandemic arrived. In 2020, the group reported a horrendous loss of €7bn. It was losing so much money last year there was a genuine chance the corporation would collapse. 

Investors who stayed with the company through this turbulent period have lost a substantial amount. According to my figures, if I had invested £1,000 in the enterprise five years ago, I would have just £570 today. These figures include reinvested dividends. That is a total overall decline of 43%. 

The big question is whether it’s worth buying the stock ahead of a potential recovery.

Are IAG shares worth buying?

IAG, which owns the British Airways brand among others, is not the only airline in the world. Plenty of its peers have had to scrape through the pandemic. 

But some of these have achieved a much better performance for shareholders. Wizz Air (LSE: WIZZ), a low-cost carrier that operates primarily in Central and Eastern Europe but also has operations in the UK, has been able to capitalise on the current environment to grab market share. 

What’s more, as IAG tries to tap all of its financial resources to survive, Wizz has been expanding. It recently placed a substantial order for new aircraft, increasing its capacity and reducing fuel consumption.

And as IAG continues to lose money, Wizz recently announced a return to profitability, although it is unclear if this trend will continue. 

Over the past five years, Wizz’s profits and revenues have grown substantially. Its share price has reflected this growth, with the stock returning more than 18% per annum. If I had invested £1,000 in the company back in 2016, this investment would be worth nearly £2,500 today. 

The performance gap between Wizz and IAG shares shows clearly how the fortunes of these two airlines have differed over the past five years. 

Future growth potential

Past performance should never be used as a guide to future potential, of course. So, just because the low-cost carrier has outperformed its peer IAG, it does not necessarily mean this trend will continue. 

However, IAG’s weak balance sheet, old fleet and high cost base lead me to conclude that the company could struggle to match Wizz’s growth even if the global air travel market rebounds in 2022. 

Wizz has a cash-rich balance sheet to support its growth, a lower cost base, a newer fleet and room to expand its low-cost European travel routes. 

That is not to say the company will be free of challenges. It could encounter risks such as a rising fuel prices and competition, which would almost certainly impact its growth rate. 

Moreover, the domestic European air travel market is highly competitive. IAG has the edge over Wizz on transatlantic routes, which are far more lucrative. If this market recovers rapidly, IAG’s profits may rebound. 

Nevertheless, I would avoid IAG shares in 2022 and buy Wizz for my portfolio instead. 

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

In 2021 we saw stock markets rally all over the globe. Some international indices like the Dow Jones in the US and Japan’s Nikkei hit record highs as Covid-19 vaccinations helped the global economy reopen and corporate profits to rebound. In the UK the FTSE 100 has risen by double-digit percentages in the year to date too.

But as we move into 2022 economies are slowing, putting company earnings back in danger. The coronavirus crisis is worsening again because of the super-spreading Omicron variant. Inflation is going through the roof due to product supply issues and escalating energy prices. And central banks are hastily hiking interest rates to curb eye-popping price rises.

10 stocks for 2022

I’m thinking about adding some classic ‘defensive’ stocks to my portfolio to protect myself from these challenges. The sorts of UK shares I’m looking at provide services that are in high demand at all points of the economic cycle. Here are 10 companies I’m considering buying.

Defence spending could rise again

Defence companies are classic investor lifeboats when economic challenges arise. Governments need to keep their arsenals well stocked at all times to protect themselves. In fact spending by Western nations is particularly strong today as tensions with Russia and China grow.

I’m thinking of buying industry goliath BAE Systems to ride this theme. The FTSE 100 company’s market-leading products across land, air and sea make it a major supplier to the US and UK armed forces, and by extension a very attractive investment target for me. I’m also looking at mask and body armour maker Avon Protection and flare and decoy manufacturer Chemring. I’d buy them even though any potential product failures could prove devastating to future sales.

A big year for general insurance?

History shows us that demand for general insurance products remains stable even during economic downturns. Travel insurance providers could take a hit if the pandemic rolls on and claim levels escalate. But on the whole, I believe many UK insurance shares should still perform strongly in 2022.

I reckon diversified products provider Direct Line Insurance Group could be a winner next year, helped by the colossal brand power of its divisions. I’d also buy motor specialists Sabre Insurance and Admiral as the legal requirement for drivers to have cover gives these businesses an extra layer of security. I think all three are great buys even as climate change threatens to send claims costs much higher.

Staying safe with UK utilities shares 

I’m also considering snapping up some utilities shares to shore up my portfolio in 2022. Water supplier Severn Trent, electricity generator Contour Global and utilities infrastructure specialist Fulcrum Utility Services are three UK shares whose services should remain in high demand even if the economy tanks.

I’d also buy renewable energy stocks like wind power giant SSE as demand for low-carbon energy soars. I’d invest in all four of these shares despite the threat that regulatory changes could impact shareholder returns.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Admiral Group and Avon Protection. 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.

If I had a lump sum of £500 to invest in stocks and shares today, I would look to buy my top stocks. Thanks to the rise of low-cost and free online stockbrokers in recent years, investors can now build a diversified portfolio quickly and cheaply.

Indeed, using a broker such as Freetrade, I can build a portfolio of global stocks for almost nothing. 

I would take advantage of these factors to build my portfolio and would invest my £500 in a range of global stocks and shares to try and get the most for my money. 

Investing in stocks and shares for growth 

My portfolio build would start with a couple of high-quality blue-chip stocks. There are two companies I have in mind.

Apple is one of the world’s largest companies. It has millions of users worldwide who are willing to pay a premium for its products. It seems unlikely this tailwind will come to an end any time soon. As such, I would buy shares in the technology giant for my £500 portfolio. 

Alongside Apple, I would also acquire UK drinks giant Diageo. I think both of these firms have similar qualities. Like Apple, Diageo owns a portfolio of world-leading products, and it can demand higher prices from buyers as a result. As long as it keeps investing in its product offering, I reckon it will be able to maintain these advantages. 

Both of these companies have the advantage today, but this may not last, of course. If they underestimate the threats from competitors, they could start to lose market share. This is the biggest challenge they face, and it is something I will be keeping a close eye on as we advance. 

Income stocks 

As well as the growth companies outlined above, I would also buy income equities. Two corporations I like for this bucket are Vodafone and BP. These firms both yield around 5%, and more importantly, their dividends are supported by robust cash flows. This should support the payouts to investors, although no dividend is ever guaranteed. If either company faces a sudden drop in income, they may have to slash their dividends. 

With income and growth stocks covered, I would invest the remainder of my portfolio cash in a couple of speculative names. As these are speculative plays, I would only allocate a small percentage of my portfolio to these names. That way, I should be able to minimise any losses in my portfolio if they do not perform as expected. 

Harbour Energy and Lamprell are my speculative names. Harbour is benefiting from rising oil prices, allowing the group to reduce debt and invest in growth. Meanwhile, Lamprell is pivoting from oil and gas engineering to renewable energy engineering. This is a booming market, and if the firm can capitalise on this market growth, it could see a significant uplift in profits. 

I think these two speculative plays would provide some additional growth potential to my £500 portfolio, even though their performances are not guaranteed. 

Rupert Hargreaves owns Diageo. The Motley Fool UK has recommended Apple and Diageo. 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.

I plan to continue building a passive income portfolio in 2022, following a process I started this year. I also plan to invest around £50 a week for a total contribution of roughly £217 a month. 

In addition to building a significant nest egg, this should help me hit my income target, which is above £5,000 a year. 

To hit this target, I estimate I will need a savings pot of around £100,000. As I already have approximately 20% of this balance, I estimate it will take me roughly 12 years to hit the target. That is assuming an average annual rate of return of 8%, which is roughly in line with the 10-year FTSE All-Share historical return rate. However, I am well aware that I should never use past performance to guide future potential. 

Assuming I hit this target, I plan to switch away from growth investments to income investments. And there are at least five income investments in the FTSE 100 I would be happy to buy for my portfolio today. 

Passive income investments

As I noted above, I am targeting an annual passive income of £5,000. With a savings pot of £100,000, this suggests I will need to find shares with an average dividend yield of 5%. 

There are plenty of options, although I will be targeting companies with the most sustainable dividend payouts. 

When I say ‘sustainable’, I mean that I will be looking for corporations with a high level of dividend cover (earnings per share divided by the annual dividend per share). I am also looking for companies with a high level of revenue visibility. Businesses with long-term contracts are particularly appealing. 

With that being the case, I would acquire Aviva and Legal & General for my passive income portfolio. These two pension and life insurance giants have to manage their assets with a long-term outlook. If they do not, they could lose customers’ trust, which would be devastating. At the same time, they have to make sure the dividends they pay are sustainable and within regulatory limits. 

Regulatory controls can be a drawback as well as a benefit. Regulators could demand that these companies reduce their dividends to strengthen their balance sheets. This is one risk I will have to keep in mind. After all, all dividends are never guaranteed. 

At the time of writing, Aviva and Legal & General support dividend yields of 5% and 6%, respectively. 

Consumer brands

I would also buy Britvic and Assura for my income portfolio. Yielding 2.6% and 5%, respectively, both of these companies have a high level of dividend cover.

Assura’s income is backed by rental agreements on healthcare properties, which is fixed and defensive. Britvic owns a portfolio of strong consumer brands with a substantial market share. 

In terms of risks, both of these companies are exposed to rising interest rates. These could increase the cost of their debt and reduce profit margins. 

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Britvic. 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.