EDITOR’S NOTE: a previous version of this article stated that Harbour Energy’s production range was lowered, rather than narrowed.
I’m always on the hunt for shares that could be on the rise. To that end, I’ve trawled through the indices and I think I’ve found two FTSE 100 stocks that could soon take off. How have I arrived at this conclusion? Let’s take a closer look.
A higher oil price
First, Harbour Energy (LSE:HBR) may be in a prime position to surge. Over a number of months, the oil producer has been benefiting from elevated oil prices.
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Brent crude, for instance, is now camped above the $90 per barrel mark. What this means is that the value of Harbour Energy’s produce is continually rising.
Unsurprisingly, the shares are up 42% in the past three months and, at the time of writing, they’re trading at 449p.
For the six months to 30 June, the business reported pre-tax profits of $1.5bn. This was a huge rise compared with the previous year, when this figure stood at $120m.
Given these sparkling results, the company increased its share buyback programme by $100m to $300m. This is essentially a way for the firm to return profits to shareholders and is an indication that it’s financially healthy.
However, Harbour Energy did narrow its production range. This was largely due to the late arrival of two rigs in the UK.
Despite this, there’s still huge demand for oil and I think the company may continue to benefit from high oil prices. This will likely only be good news for the share price.
Strong revenue growth expectations
Next, Reckitt Benckiser (LSE:RKT) also catches my attention. The company – a consumer goods conglomerate – has posted consistent results over recent years. In the past month, the shares are down 6% and trade at 5,960p.
The business first of all has an attractive dividend policy. For 2021, it paid a total dividend of 174.6p. At current levels, this equates to a yield of 2.9%.
It’s important to note, however, that dividend policies may be subject to change at a future date.
The firm has revenue growth expectations of between 5% and 8% for the whole of 2022 and made £370m worth of savings in the first half of the year.
In a climate of increased hygiene awareness, Reckitt’s Dettol brand has performed very well. While many of the pandemic restrictions are now gone, I expect that reliance on cleaning products will be here to stay.
There is, of course, inflationary risk. This could come in the form of higher costs and wages. It’s possible that this could dent future balance sheets, but the company has increased its prices in order to try and offset these risks.
Overall, high oil prices and attractive revenue growth expectations lead me to believe that both of these businesses could soar in the near future. To that end, I’ll add them both to my portfolio soon.
