The FTSE 100 reaches an all-time high! Here are 2 of its best stocks to consider buying
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Yesterday (22 April) noticed the FTSE 100 shut at an all-time excessive of 8,023.87 factors. That trumps its earlier excessive of 8,012.53 in February 2023. I reckon now’s a very good time for buyers to go looking for its greatest shares.
I say that as a result of I believe we may see a sustained market rally within the months forward. Rate of interest cuts are imminent and investor sentiment is rising. As such, I need to get in earlier than costs soar.
Listed below are two of the index’s best shares to contemplate shopping for immediately.
Diageo
I believe the most effective high quality firms the Footsie has to supply is Diageo (LSE: DGE). But regardless of it posting a slight achieve in 2024, the inventory’s taken a beating over the past 12 months.
Even so, that doesn’t fear me. A less expensive share value means buyers can choose up a discount. And the enterprise stands out to me for just a few causes.
Firstly, it owns a number of the business’s hottest manufacturers, similar to Guinness and Captain Morgan rum. With that comes vital pricing energy. That hedges it, to an extent, in opposition to powerful macroeconomic situations.
Secondly, its dividend yield has proved to be extremely dependable. At 2.8%, it’s removed from the best on the Footsie. Nonetheless, Diageo shareholders have seen their payout rise yearly for practically 40 years. That’s a formidable monitor file.
The drinks market is very aggressive and, given the cost-of-living disaster, some customers have been reducing again on spending on its premium manufacturers in favour of cheaper alternate options
However, it has formidable plans. By 2030, it’s aiming to develop its share of the worldwide beverage alcohol market to six%. For context, it was 4.7% in 2022. That’s an enormous buyer base for the enterprise to faucet into.
Marks and Spencer
I’d additionally contemplate Marks and Spencer (LSE: MKS). The excessive road stalwart has posted an epic turnaround in latest occasions.
It appeared as if the enterprise was effectively and really within the doldrums. However a shift in technique that’s seen it do away with underperforming shops, enhance its product provide throughout a number of classes, and focus extra on digital have led to its share value rocketing.
I believe it will proceed. As we speak, the inventory trades on round 13 occasions earnings. That’s beneath the long-term Footsie common of 14-15. What’s extra, it’s buying and selling on simply 10.2 occasions ahead earnings.
The enterprise has posted some spectacular ends in latest occasions. For the 26 weeks ended 30 September 2023, revenue earlier than tax rose to £325.6m, a 56.2% bounce from the yr earlier than.
As such, JP Morgan lately lifted its goal value for the inventory to 330p. That represents a 26.7% rise from its present value. The dealer additionally upgraded its score to a ‘purchase’ following the spectacular market share positive factors the corporate has made.
After all, we’re not out of the woods but. Whereas inflation is falling, any signal of a setback may result in customers tightening their belts.
However as charges are lower, it will present an uplift in spending. I believe Marks and Spencer’s effectively positioned to capitalise because it continues with its thrilling turnaround.