While a lot of FTSE 100 investors are drawn to stocks trading near their 52-week lows, I’m actually more interested in those near 52-week highs. The reason for this is simple – those near 52-week highs are trending up, and share price trends can stay in place for a long time.
Here, I’m going to highlight two Footsie stocks that are currently near their 52-week highs. I own these stocks personally and I’m backing them to climb higher in the months ahead given their strong upward share price trends.
This is now a tech company
First up is London Stock Exchange Group (LSE: LSEG). It ended last week just 1.1% off its 52-week high.
The London Stock Exchange itself might be the main thing that comes to mind when you hear this company’s name. But its operations extend far beyond that today.
Believe it or not, this is actually now one of the world’s premier financial data companies. Currently, it provides data to 99 of the top 100 global banks and 75 of the top 100 global asset managers.
But here’s the thing. Its valuation is relatively low for a financial data company. Currently, the forward-looking price-to-earnings (P/E) ratio is just 24 using next year’s earnings forecast. That’s one reason I’m backing the stock to climb higher.
It’s worth pointing out that a P/E ratio of 24 is high relative to the market average. So, if near-term revenue growth was to come in below expectations, the share price uptrend here could come to an abrupt halt.
Given that the company is shortly about to provide customers with a bunch of new artificial intelligence-powered solutions though, I’m optimistic about its prospects.
Note that Jefferies recently slapped a 11,500p price target on the stock.
An attractive dividend on offer
The other stock I want to highlight is consumer goods company Unilever (LSE:ULVR). It finished last week just 0.7% off its 52-week high.
Now, this stock is on fire at the moment. One reason for this is that the company has a new management team in place. They’re looking to turn Unilever into a lean and efficient company. And recent results indicated that they’re off to a good start, with strong sales from the company’s ‘Power Brands’.
I’m optimistic that the shares can continue to rise from here. And that’s because of the direction of interest rates. You see, in recent years, Unilever’s rock-solid dividend has lost some of its charm because investors have been able to get high rates from savings accounts. With rates likely to fall in the second half of 2024, its dividend (which currently yields around 3.5% and continues to grow at a healthy rate) could come back into focus, pushing the share price up.
I think the big risk with this stock in the near term is a consumer slowdown. After a few years of high interest rates, a lot of people are pretty stretched and looking to save money when shopping.
I have tried a few ‘private label’ products recently though and many have been terrible. So, I’m backing Unilever products to remain popular.
It’s worth noting that analysts at JP Morgan have a 5,100p price target on Unilever. If that target comes to fruition, I could be looking at a return of around 18% when dividends are factored in.
The post These 2 FTSE 100 stocks are near 52-week highs. I’m backing them to continue rising appeared first on The Motley Fool UK.
Like buying £1 for 31p
This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p they invest!
Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.
What’s more, it currently boasts a stellar dividend yield of around 10%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?
See the full investment case
More reading
3 world-class FTSE 100 dividend shares I’d consider buying for lasting passive income
The Unilever share price recovery has finally begun and I think it will keep climbing
3 stocks that could create lasting passive income
This explosive UK stock has hiked dividends by 14.6% a year for a decade. Time to buy?
One of Britain’s best-performing fund managers has been buying this FTSE 100 stock
Edward Sheldon has positions in London Stock Exchange Group Plc and Unilever Plc. The Motley Fool UK has recommended Unilever 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.
