2 brilliant FTSE 100 stocks investors should consider buying in 2024!

Our writer breaks down two excellent FTSE 100 stocks, and why she thinks they are on track to perform well in the coming year and beyond.

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Two FTSE 100 stocks that I think investors should be considering snapping up are Sage Group (LSE: SGE) and Barratt Developments (LSE: BDEV). Here’s why!

Sage Group

Sage is a leading provider of enterprise software, and the shares have been performing well for some time. I reckon they’ll continue this upward trajectory.

Over a 12-month period, the shares are up 57%, from 745p at this time last year, to current levels of 1,175p, as I write on Wednesday, 20 December.

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Created with Highcharts 11.4.3Sage Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Full-year results posted last month for the year ended 30 September 2023 were excellent, and showed me how well the business is doing despite macroeconomic volatility. Revenue and operating profit increased by 10% and 18% respectively. Plus, the business has an enviable track record of performance growth through acquisitions and organic measures, too. However, I do understand past performance is not a guarantee of the future.

Buying some shares would boost passive income with a dividend yield of 1.7% on offer too. It’s worth remembering dividends are never guaranteed.

From a risk perspective, Sage shares do look a bit pricey on a price-to-earnings ratio of 36. Any bad news could send the shares tumbling. However, I’m a firm believer that sometimes you must pay a pretty penny if you want to buy quality.

Finally, one aspect that I reckon will help Sage shares, and the business, to grow, is the firm’s decision to continue to incorporate artificial intelligence (AI) tools into its offering. This is a threat to the software company’s future prospects but it looks to be moving with the times already.

Barratt Developments

Barratt Developments is one of the largest house builders in the UK, and 2023 has been a bit of a damp squib for the firm. Higher interest rates and soaring costs have hampered the business. However, the longer-term picture is fruitful, if you ask me.

As I write, Barratt shares are trading for 558p. At this time last year, they were trading for 394p, which is a 41% increase over a 12-month period.

Created with Highcharts 11.4.3Barratt Redrow PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Current soaring costs, which could continue take a bite out of profit margins, are an ongoing risk I’ll keep an eye on. After all, profits underpin returns as well as growth aspirations.

However, looking forward, demand for housing is outstripping supply. Barratt can capitalise on this and boost performance and potential payouts. If interest rates start to come down and other volatility dissipates, this could be good news for the firm as completions and purchase numbers could rise.

At present, Barratt shares look excellent value for money on a price-to-earnings ratio of just eight. In addition to this, the passive income opportunity looks too attractive to ignore, if you ask me. A dividend yield of over 6% is much higher than the FTSE 100 average of 3.9% and looks well covered by earnings.

To summarize, although some short-term pain may be to come, I reckon Barratt shares could be a great longer-term buy and hold option for investors to consider.

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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.

Sumayya Mansoor has positions in Sage Group Plc. The Motley Fool UK has recommended Sage 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.

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