My investment strategy’s rather simple. I plan to buy FTSE 100 stocks I see as good value and hold them for the decades. It’s a method I’ve been using for the past couple of years. Over time, I know it’ll pay off.
I see a number of brilliant buying opportunities in the UK-leading index right now. And it’s often difficult to whittle it down to which are my favourites. However, these two are most certainly up there. If I had the cash, I’d buy both today.
Marks & Spencer
First up is Marks & Spencer (LSE: MKS). Its shares have had a cracking year. In 2024, they’re up 33.6%. They’ve performed even better in the last six months, climbing 53.2%. During the same time, the Footsie’s up 7.2%.
But even after going on a tear, I think its shares still look great value. They’re trading on a price-to-earnings (P/E) ratio of 17.7 and a forward P/E of 14.2. Granted, that’s above the FTSE 100 average of 11. But I’ll happily pay a small premium for a quality business.
M&S’s turnaround in the last few years has been exceptional. The retail giant was falling behind its competition. Its stores were run down and it was failing to keep up with current trends.
But that now has changed. It has upgraded its stores to provide a more modern feel and put a larger focus on improving its online presence. Profits jumped 58% last year, so something must be working.
Despite the strides it has made, there are still a few risks. The most pressing is the current state of the economy. While inflation’s fallen, it remains a threat. If it were to rise again, or if we were to see a delay in future interest rate cuts, M&S stock would most likely take a hit. That’s something I’ll be tracking in the months ahead.
But as we see rates cut over the coming years, that should lead to an uptick in spending. I also like the trajectory M&S is on. That’s why I’m bullish about it over the long run.
Schroders
I also really like the look of Schroders (LSE: SDR). Unlike its FTSE 100 peer, it’s struggled this year, down 20.9% year to date and 16.9% over the last 12 months.
But now trading on a P/E of 14.1 and a forward P/E of 10.1, I think Schroders looks like it could be a shrewd buy today.
What’s more, its falling share price translates to a bigger dividend yield. Right now, it sits at 6.2%, comfortably above the FTSE 100 average of 3.6%. In its latest update, its interim dividend remained flat at 6.5p.
Ongoing economic uncertainty’s been a big detriment to the firm’s operations and will remain a threat. For example, like M&S, a delay in rate cuts could see its share price pulled back further.
But in the long run, I back Schroders to perform. As rates do come down, that should boost investor confidence and give markets some much-required positive sentiment.
The post I’m loving the look of these 2 FTSE 100 stocks! appeared first on The Motley Fool UK.
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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Schroders 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.
