With the market having fallen, I think these three FTSE 100 shares are perfect for investors looking to make use of their new ISA allowance.
A FTSE 100 bargain
Berkeley Group (LSE: BKG), unlike quite a number of its housebuilding peers has maintained its dividend. Good news for investors looking for income when many companies are cutting payouts.
The builder can do this because by investing smartly, the balance sheet currently has just over £1bn of cash. The group has a further £750m in available credit.
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What I like about Berkeley, and what I think will serve it well through this crisis, is the quality of its management. The co-founder is still on the board as chairman and the CEO has been with the group since 1994.
Despite Covid-19, Berkeley now expects profits for the year ending 30 April 2020 to be in the region of £475m.
Even if the dividend is cut in the future, I believe the shares deserve to be put into an ISA based on their low value, which I think make them a FTSE 100 bargain share.
A leaner Asia-focused group
Prudential (LSE: PRU) offers something very different to Berkeley. It gives much greater exposure to the dynamic, fast growing economies of Asia. Looking beyond coronavirus, the business looks attractively positioned to benefit from demographic changes in this region.
Showing how well the business was performing in the year before it split its Asian business from M&G, operating profits increased 20% to reach $5.3bn. This performance was driven largely by strong growth in both the US and Asia across life insurance and asset management.
The group intends to work towards listing a stake in its US Jackson business on the stock exchange. However, coronavirus has thrown a spanner in the works.
But such issues aside, through buying the shares now, investors would be putting their money into a FTSE 100 business which is focusing on Asia and has attractive opportunities to grow. That sounds good to me.
Getting much bigger
London Stock Exchange (LSE: LSE) is bulking up instead of getting leaner. It’s on track to complete its $27bn takeover of analytics company Refinitiv on time this year.
Analyst Laura Suter has said of this: “The deal could transform LSE into the world’s leading financial markets services company and ensure continued growth for many years to come.”
It’s clearly a deal with transformational potential, although like all big acquisitions, it carries some risk for investors. Vodafone, Micro Focus, and many others, provide examples of what happens when major acquisitions go wrong. Shareholders lose out.
However, London Stock Exchange clearly has the potential to gain from the deal. It has made other deals as well. For example, the newly-acquired Beyond Ratings business has broadened its environmental, social and governance appeal to bond investors.
The P/E has fallen from 38 last year to around 33 now. The shares then are a relative bargain. Expensive compared to some other businesses, but that reflects the quality of the business. They are still a good bet for an ISA in my book.
