It’s been a strong month for the FTSE 100. With that in mind, I want to go hunting for more stocks to add to my portfolio.
I love Footsie shares. I like the idea of holding high-quality companies that have been consistently performing for decades. What’s even better, a host of them look like absolute bargains at the moment.
I’ve got my eye on two. If I have the spare cash in April, I’ll be picking them up.
Blue Eagle Bank
The first is Barclays (LSE: BARC). At 185.6p, I think it’s too cheap to ignore. I’ve slowly been adding to my position in the stalwart bank. So far, I’ve made a paper profit of 30.2%.
The stock has gained some momentum this year. But I think it has further room for growth. It’s trading on just 6.9 times trailing earnings. That makes me believe investors may be undervaluing Barclays.
To go with that, I see it as a great passive income play. Granted, its dividend yield of 4.3% is far from the highest out there. But even so, it’s still above the FTSE 100 average of 3.9%.
It’s also covered three times by trailing earnings. And recently, the business has laid out its intentions to keep rewarding shareholders. By 2026, it’s set to return £10bn via dividends and share buybacks. That’s what I like to see.
The business faces risks and I’d suspect that banks may continue to suffer this year. High interest rates are an ongoing threat. Furthermore, it reported a £900m restructuring cost in the last quarter of 2023.
However, in the long run, which is what matters the most, I think its plan to streamline by splitting up into five divisions will pay dividends. At its current price, I think Barclays is a steal.
Supermarket behemoth
Next up is a stock I don’t own but have had on my watchlist for a while: Tesco (LSE: TSCO). There are a few main factors why I’m keen to add the supermarket giant to my portfolio.
Firstly, it’s for that exact reason. It’s an industry giant. Tesco has a 27.3% share of the market. The closest to that is Sainsbury’s with ‘just’ 16%. With this dominance comes many benefits, including economies of scale.
Secondly, I want to add more defensive stocks to my portfolio. With the UK in a technical recession, it makes sense to own these types of companies. Regardless of economic conditions, people need to eat.
Like with Barclays, I can also make some extra cash with Tesco shares. They yield 3.7%. In the last five years, its yield has experienced impressive growth.
The biggest risk that Tesco will have to overcome is the rise of budget competitors such as Aldi and Lidl. The German chains have become extremely popular lately as consumers look to cut down on costs.
However, Tesco is combating this as it continues to expand both its online presence as well as build new physical stores. It also has its Clubcard scheme, which boasts over 20m loyal users. With any investable cash, I’ll be snapping up both in the upcoming weeks.
The post 2 FTSE 100 stocks I’m eyeing for April appeared first on The Motley Fool UK.
5 stocks for trying to build wealth after 50
Inflation recently hit 40-year highs… the ‘cost of living crisis’ rumbles on… the prospect of a new Cold War with Russia and China looms large, while the global economy could be teetering on the brink of recession.
Whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times. Yet despite the stock market’s recent gains, we think many shares still trade at a discount to their true value.
Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…
We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.
Claim your free copy now
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#ffffff”, ‘color’, ‘#FFFFFF’);
})()
More reading
Here’s how many Tesco shares I’d need for a £1,000 yearly second income
3 cheap FTSE 100 dividend stocks to consider buying in April
I was right about the Barclays share price! Here’s what I think happens next
How I’d turn my £12,000 of savings into passive income of £1,275 a month
3 of the best FTSE 100 stocks I’d buy as a beginner investor
Charlie Keough has positions in Barclays Plc. The Motley Fool UK has recommended Barclays Plc, J Sainsbury Plc, and Tesco Plc. 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.
