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Two rock-solid FTSE 100 shares I imagine can provide good returns for me and my holdings are GSK (LSE: GSK) and Taylor Wimpey (LSE: TW.).
Right here’s why I’d love to purchase some shares after I subsequent have some money to take a position.
GSK
As one of many main names in prescribed drugs, GSK presents wonderful defensive traits, for my part. That is as a result of cutting-edge pharma it produces with medicines and coverings to assist the world heal from numerous illnesses.
Final month, a choose in Delaware voted in favour of over 70,000 lawsuits to go forward in opposition to the corporate. This associated to GSK’s Zantac drug and its potential hyperlinks to inflicting most cancers. Though GSK denies any proof to counsel a threat of most cancers, the prospect of main fines and reputational injury is a threat I’ll keep watch over.
From a bullish view, and given the defensive features talked about, I feel there’s quite a bit to love concerning the enterprise.
To begin with, the shares at present commerce on a price-to-earnings ratio of 14. It’s additionally set to go decrease, based mostly on forecasts. Nevertheless, I do perceive that forecasts don’t all the time come to fruition.
Subsequent, GSK shares provide a dividend yield of three.9%, which is broadly according to the FTSE 100 common. I can see this dividend rising sooner or later too, based mostly on the agency’s repute, expertise, and future pipeline. It’s price mentioning that dividends are by no means assured.
Total, a longtime title out there, an attractive valuation, passive earnings alternative, and what seems like a strong R&D pipeline with over 90 merchandise to return, assist me make an funding determination right this moment.
Taylor Wimpey
Home builders haven’t had a good time of issues prior to now 12-18 months, resulting from financial volatility. Larger inflation, rates of interest, and a cost-of-living disaster have harm earnings and sentiment.
Inflation ranges at the moment are down, and rumours of a possible rate of interest lower may spell excellent news. A possible housing increase could possibly be on the horizon. Nevertheless, financial points are one of many largest dangers for Taylor Wimpey, and one thing that would dent earnings and returns. For instance, increased prices may imply tighter margins and revenue ranges. I’ll keep watch over this.
If a housing increase is coming, Taylor Wimpey is primed to profit. At current, the shares look engaging to me.
Taylor is likely one of the largest builders within the UK. It possesses a large presence, in addition to loads of expertise and a strong monitor document. This might serve it properly as there’s a housing disaster within the UK. With demand outstripping provide, there is a chance for the agency to capitalise, and develop earnings and efficiency.
Lastly, the basics look good to me too. Taylor possesses a wholesome steadiness sheet, which might help stave off financial turbulence, in addition to assist development. Plus, the shares provide a dividend yield of 6.6% and commerce on a P/E ratio of simply 14.
