Two Top FTSE 250 Shares to Watch in 2022
The UK’s FTSE 250 index is comprised of 250 mid-cap companies listed on the London Stock Exchange (LSE). The index is full of a range of diverse stocks which provide investors with both growth and income opportunities.
In this article, we will examine two of the top FTSE 250 shares that investors should consider adding to their portfolios in 2022.
What Is the FTSE 250?
The FTSE 250 is the UK’s second tier stock index, after the FTSE 100. Whilst the FTSE 100 is comprised of the 100 largest companies by market capitalisation listed on the LSE, the FTSE 250 is made up of the next 250 largest companies.
As such, many of the companies are much smaller than the FTSE 100 constituents, which can offer investors better opportunities for growth.
Although the FTSE 100 is usually deemed the UK’s benchmark index, many of the companies within it are international corporations which draw the majority of their revenue from overseas. The FTSE 250, on the other hand, is far more domestically focused and, for that reason, is viewed by many as a better gauge for the health of the UK economy.
If you are interested in learning more about the differences and similarities between the FTSE 100 and the FTSE 250, you can read our other article:
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Top FTSE 250 Shares to Watch in 2022
Now we know have a better idea of what the FTSE 250 stock index is, what are the top FTSE 250 shares to watch in 2022? In the next sections, we will be looking closely at the following two companies:
- Pets at Home
- Tritax Big Box
Pets at Home
Perhaps not what you were expecting when you clicked on this article, but Pets at Home is the first of our top FTSE 250 shares to watch and one which could provide long-term value to investors.
During the Covid-19 pandemic, a remarkable 3.2 million UK households acquired a pet, taking the total number of pet-owning households to 17 million who own a combined 34 million animals between them. That’s a lot of pets.
Anyone who has ever owned or cared for a pet understands that the bond between pet and owner is often not dissimilar the bond between family members and friends and, sometimes, even stronger. In other words, when it comes to caring for a pet, an owner’s demand for the necessary products is fairly inelastic and, with the recent boon in pet ownership, the level of this demand has risen considerably.
Pets at Home is somewhat of a rarity in the UK, being a pet store chain which operates nationwide, having taken over other businesses along the way. Across the country the company operates 452 stores and an additional 316 grooming salons. Furthermore, the company also operates 441 veterinary practices on a joint venture basis.
This nationwide reach positions the company favourably to meet rising demand in pet-related products and services both now and in the future.
One of the interesting features of the business is their subscription services for various treatments, of which they currently have over one million customers. This customer base is currently only responsible for a small percentage of total revenue, but the customer base is growing and along with it the revenue which it is generating.
Tritax Big Box REIT
Unless you have been living under a rock for the last few months, you will have no doubt heard that inflation is currently on the rise across the world, and the UK is no exception.
Despite the Bank of England having already taken measures to control rising inflation before it gets out of control, it is fairly safe to assume that the topic of inflation will be a significant theme in 2022.
Investors will need to consider rising inflation when choosing investments this year, which is what we’re doing with the next of our top FTSE 250 shares, Real Estate Investment Trust (REIT) Tritax Big Box.
The property sector tends to perform well during periods of high inflation, due to the fact that property prices rise and landlords can increase their rent.
Tritax Big Box owns a large portfolio of warehouses which it rents out to major businesses, providing the business with a reliable stream of income. Its top five customers are Amazon, Morrisons, Tesco, Howdens and Co-op, which account for around 37% of its total contracted annual rent.
Focusing on this investment from an inflation perspective, according to its H1 2021 results, 49% of its portfolio has rent reviews which are linked to rises in either consumer or retail prices.
One of the appealing characteristics of this top FTSE 250 stock is that much of its customer base (63%) operates in resilient sectors, such as e-commerce and food retail, which, in turn, provides Tritax with a certain level of resilience to market uncertainty. Furthermore, being a REIT, the stock is obliged to pay a significant percentage of its profits to shareholders in the form of a dividend. Currently, its dividend yield sits at around 2.7%.
Top Performing FTSE 250 Stocks in 2021
So now we have some ideas of which FTSE 250 stocks to watch in 2022, what happened last year? Here are the five top performing FTSE 250 stocks of 2021:
|Company||Percentage Gain in 2021|
|Watches of Switzerland (WOSG)||145%|
|Volution Group (FAN)||98%|
Source: London Stock Exchange. Top Performing FTSE 250 Stocks in 2021. Date Captured: 17 January 2022.
How to Invest in the Top FTSE 250 Shares with Admirals
If you are interested in buying either of the top FTSE 250 shares we have looked at in this article, you will be pleased to know that you can do so with an Invest.MT5 account from Admirals!
In order to start investing, follow these steps:
- Open an Invest.MT5 account with Admirals
- Download the MetaTrader 5 trading platform
- Open MetaTrader 5, press Control + U and search for the top FTSE 250 shares you wish to invest in, once located click ‘Show Symbol’
- Locate the stock in ‘Market Watch’ on the left-hand side of the screen, right click and press ‘Chart Window’ to open a price chart
- Press ‘New Order’ at the top of the screen, select the number of shares you wish to purchase and click ‘Buy’ to send the order to the market
Investing with Admirals
With an Invest.MT5 account from Admirals, you can buy shares in Pets at Home, Tritax Big Box and over 4,300 other companies from 15 of the largest stock exchanges in the world! Click on the banner below in order to open an account today:
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