It’s easy to get caught up in the fanfare of the top FTSE 100 shares, whether they’re popular names or consistently story stocks.
Others can often quietly go under the radar but also represent great investment opportunities, if you ask me.
Two picks I reckon investors should be taking a closer look at are Unite Group (LSE: UTG) and The Weir Group (LSE: WEIR).
Unite Group
Unite is set up as a real estate investment trust (REIT). It develops and operates student housing across the UK.
REITs are a great way to boost passive income, as these types of investment trusts must return 90% of profits to shareholders.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.
Unite shares are up 1.5% over a 12-month period as they were trading for 979p at this time last year, to current levels of 994p. I reckon market volatility including rising interest rates and soaring inflation has hampered the shares from climbing further. This has also been the case for many FTSE 100 shares.
The positive for Unite is that demand for student beds is outweighing supply levels. If it can plug this gap, I can see performance and payouts growing in the future. Speaking of payouts, a dividend yield of 3.4% is attractive. However, it’s worth remembering dividends are never guaranteed.
From a bearish perspective, a recent government review into foreign student visas may curb new international student numbers. This could hurt Unite’s uptake, as well as performance and return levels. I plan to keep an eye on any developments on this front.
For me, demand outstripping supply, a great investor return policy and level of return, as well as extremely strong brand power, make a compelling investment case.
Weir Group
Scottish-based aero engineering firm may not be a well-known name among those who don’t know the industry well. However, I view it as another potentially great way to gain exposure to the sector. This is away from other larger names such as Rolls-Royce or BAE Systems.
Weir shares haven’t moved much over this past year. In fact, they’re down by 1.5% from 1,841p at this time last year, to current levels of 1,813p.
When the pandemic struck, the aerospace industry ground to a halt. However, since we seem to be over that, burgeoning demand could boost Weir shares in the long term. Plus, the business recently announced plans to strategically boost operating margins. It could also continue its acquisition strategy to stimulate further growth and boost market presence.
At present, a dividend yield of 2% helps the investment case. Plus, if the business can boost margins as it is trying to do, and grow, payouts could also be boosted.
A current valuation on a price-to-earnings ratio of 23 may seem expensive. However, if the firm achieves forecast targets for 2024, this could drop to 14, making the shares more attractive, in my eyes.
A risk I’ll keep an eye on is what looks to be rising debt levels on its balance sheet. This is especially as it can be costlier to pay down during times of high interest, like now. Higher debt levels could impact growth aspirations as well as investor returns.
The post 2 under the radar FTSE 100 shares investors should consider buying 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
If I’d invested £5k in Lloyds shares 5 years ago, here’s what I’d have now
2 juicy FTSE stocks to help create a second income!
This FTSE 100 giant could be 49% undervalued
Steady growth makes this a FTSE 250 stock for defensive investors to consider buying
Is this the start of the great 2024 stock market surge?
Sumayya Mansoor has no position in any of the shares mentioned. The Motley Fool UK has recommended Weir Group 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.
