2 FTSE 100 shares I’m buying for a market recovery

Andrew Woods explains how adding FTSE 100 shares to his portfolio is part of his plan to respond to a market recovery.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Bearded man writing on notepad in front of computer

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

The FTSE 100 is full of exciting and interesting companies that may offer long-term growth. I’ve trawled through the index to find stocks I can invest in as the market recovers. Let’s take a closer look.

High revenue expectations

First, Experian (LSE:EXPN) reiterated its full-year guidance in a report for the three months to 30 June. At the time of writing, the shares are trading at 2,770p. 

Created with Highcharts 11.4.3Experian Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

In the same results, the credit reporting firm stated that revenue grew by 7%, with full-year revenue expected to rise by between 7% and 9%.

Should you invest £1,000 in British American Tobacco right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if British American Tobacco made the list?

See the 6 stocks

The business has been benefiting in the last couple of years from a very active property market.

However, Citi downgraded the company in August to ‘neutral’. It provided a couple of reasons for this move, including a decline in housing transaction volumes. In July, for instance, housing transactions fell by 20% year on year.

While this may be worrying in the short term, it’s probable that the housing market will pick up again at some point soon.

What’s more, the business has enjoyed attractive earnings growth over the past five years. For the years ended March, between 2018 and 2022, earnings per share (EPS) rose from ¢94.4 to ¢124.5. This means that the firm has a compound annual EPS growth rate of 5.7%. I consider this consistent and appealing. 

11.88% yield!

Second, Rio Tinto (LSE:RIO) may offer both growth and income to me. It’s widely known to boast one of the highest dividend payments on the market, paying $10.40 per share in 2021. This equates to a dividend yield of around 11.88%.

Created with Highcharts 11.4.3Rio Tinto Group PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Last year, the mining firm benefited from elevated commodity prices. Between 2020 and 2021, for instance, pre-tax profit grew from $15.3bn to $30.8bn. 

Recently, however, a market slowdown and possible recession has led to deteriorating results.  

Despite this, demand for base metals, particularly copper, is set to increase in the coming years. That’s because these components are critical for environmentally-friendly products, like electric cars. 

As such, I think there’s a strong possibility that commodity prices will rise in future. This could be good news for Rio Tinto.

The business has been making strong efforts to expand in the copper market, making a $2.7bn bid for Mongolian copper mine owner Turquoise Hill Resources

This bid was unsuccessful, but Rio Tinto acquired the company after increasing its offer to $3.3bn. This may allow the business to engage in further copper exploration, thus supporting long-term production plans.

Overall, both of these firms undeniably face challenges in the short term. With investing, however, I prefer to look beyond the end of my nose. The possibilities for growth and income in these expanding businesses is too great to ignore, especially if and when the market rebounds. I’ll be adding shares of both companies to my portfolio soon. 


Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Andrew Woods has no position in any of the shares mentioned. The Motley Fool UK has recommended Experian. 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.

More on Investing Articles

Rolls-Royce's Pearl 10X engine series
Investing Articles

Rolls-Royce shares have reached £10. Too late to buy?

Selling for pennies as recently as 2022, Rolls-Royce shares recently topped a tenner apiece. Our writer assesses whether he's too…

Read more »

UK coloured flags waving above large crowd on a stadium sport match.
Investing Articles

Meet the $2 stock up 366% that UK investors are piling into

UK stock investors have been snapping up this meme stock recently. Incredibly, it has more than quadrupled since June! What's…

Read more »

Middle-aged Caucasian woman deep in thought while looking out of the window
Investing Articles

Down 49%, is this well-known name the deep-value stock it seems?

Our writer has been tempted to add more B&M shares to his portfolio after a recent tumble. So what's holding…

Read more »

Abstract 3d arrows with rocket
Micro-Cap Shares

After falling 80% from a 52-week high, is this penny share a screaming buy?

This penny share company skyrocketed earlier this year, but the share price has since fallen back. Is it a new…

Read more »

British Pennies on a Pound Note
Investing Articles

This penny stock rose 49% in a year. Here’s why it may still be a terrific bargain

This penny stock has soared by 49% in 12 months -- but still sells for far less than the sum…

Read more »

Businessman using pen drawing line for increasing arrow from 2024 to 2025
Investing Articles

MHA is a UK stock market success story that deserves your attention

MHA listed on the UK’s stock market in April and has performed extremely well. Dr James Fox explains why the…

Read more »

A senior man using hiking poles, on a hike on a coastal path along the coastline of Cornwall.
Investing Articles

£20,000 in savings? Here’s how a Stocks and Shares ISA could generate £621 a month of passive income – tax-free!

Christopher Ruane explains how a Stocks and Shares ISA could potentially generate sizeable long-term passive income streams from proven businesses.

Read more »

A rear view of a female in a bright yellow coat walking along the historic street known as The Shambles in York, UK which is a popular tourist destination in this Yorkshire city.
Investing Articles

Up 269% in 5 years, could the Marks and Spencer share price go even higher?

Christopher Ruane explains some of the reasons the Marks and Spencer share price has boomed in recent years -- and…

Read more »