I am already looking for investments to add to my Stocks and Shares ISA in 2022. I am searching for both income and growth investments that could earn the best return on my cash for the year ahead.
With that in mind, here are five equities I would acquire today based on their income and growth credentials.
Investing for income and growth
The first company on my list is the homebuilder Bellway. I think the outlook for the UK home construction sector is incredibly encouraging as property prices rise and supply remains constrained.
As well as this growth potential, these companies also have an excellent track record of returning cash to investors. Bellway offers a dividend yield of 4.1%, at the time of writing.
Alongside this firm, I would also acquire building materials supplier CRH. As one of the largest building materials suppliers in Europe, the company is an excellent proxy for the construction industry.
As the economy across the region has started to rebuild from the pandemic, the sector has bounced back quickly. The demand and price of materials has jumped as a result. This suggests that suppliers like CRH could see record profits in the year ahead. The stock also offers a dividend yield of 2.8%.
Along the same theme, I would also add structural steelwork company Severfield to my Stocks and Shares ISA. This company is a bit riskier than the stocks outlined above, because it is smaller.
Still, I think it is another excellent proxy for the UK construction market, which is experiencing a solid pandemic recovery, supported by growing government spending. The company is projected to report earnings growth of 23% for 2022. The stock yields 4.5% at the time of writing.
All of the three stocks above have potential, but there are a couple of risks I will also be taking into account. If the economy takes a turn for the worst next year, these businesses will suffer. The construction industry is usually the first to feel the heat in any downturn. Therefore, I will be keeping an eye on the economy going forward.
Stocks and Shares ISA buys
Private healthcare services company Mediclinic is projected to report net profits of £169m for 2022, up from £68m for its 2021 fiscal year. Demand for private medical services is surging, and it seems as if this stock is set to profit from this trend. That is something I would like to build exposure to in my portfolio for the year ahead.
The healthcare sector, in general, is seeing a mini boom, thanks to the pandemic. That is why I would also add Hikma to my Stocks and Shares ISA portfolio. With its broad portfolio of generic drugs and treatments, the company is well-placed to ride the growing global demand for healthcare services.
However, Hikma, like Mediclinic, is exposed to a couple of significant challenges. These include competition and regulatory headwinds, which could hit growth. I will be keeping these risks in mind as we advance.
- More than 1 in 4 Brits took out a loan in 2021 – but not for the reasons you think
- How I’d invest £500 for 2022 and beyond
- 2 reasons why the JD Sports share price is down 14% in the past month
- This FTSE 350 share is down 40% this year. Will 2022 see a bounce-back?
- Will the Photo-Me share price rise in 2022?
Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Hikma Pharmaceuticals. 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.