My top 3 FTSE 100 stocks for 2017

Updated: 
National Grid electricity pylons

Today I'm looking at three stocks that could thrive in 2017.

Power up

The scale and multitude of geopolitical and macroeconomic challenges next year could prompt a spending spree for defensively-minded stocks, in my opinion.

And in this regard I reckon National Grid(LSE: NG) could explode. Electricity is of course one of those commodities we can't do without, regardless of broader economic considerations, giving the network operator unrivalled earnings visibility.

National Grid's ultra-attractive valuations certainly leave room for additional share price strength. A modest earnings fall in the period to March 2017 is followed by a predicted 3% rise in the following fiscal year, resulting in decent P/E ratios of 14.7 times and 14.2 times respectively.

Meanwhile, a likely acceleration in the inflation rate should also drive dividend hunters into the stock -- the company sports a 4.8% dividend yield for this year and 5.5% for 2018, smashing the FTSE 100 average of 3.5% to smithereens.

Manufacturing marvel

Investor demand for Unilever (LSE: ULVR) has trickled lower since the firm became involved in a very public spat with Tesco in October, when the household goods leviathan sought to pass on the impact of unfavourable currency movements to the grocery giant by raising prices.

Share pickers have been spooked by the prospect of further terse negotiations as sterling looks likely to stay low in 2017. But I believe a trick may have been missed here -- Marmite, Lynx and Flora can still be found on the shelves of the country's major supermarkets despite Unilever's aggressive bargaining actions, illustrating the colossal brand power of its labels.

And in an environment where rising inflation is likely to dent shopper spending power in the UK, the importance of products with strong pricing power can't be underestimated, and is likely to become increasingly apparent.

The City certainly sees no reason for Unilever's growth story to grind to a halt, particularly as the firm's massive geographical footprint should mitigate trouble in one or more key territories and keep sales on an upward keel. The manufacturer is anticipated to generate a 9% earnings advance in 2017, resulting in a P/E ratio of 18.2 times.

While nudging above the big-cap forward mean of 15 times, I reckon the huge growth potential created by its pan-global presence, not to mention the ongoing investment in its industry-leading labels, merits this modest premium.

Engineer a fortune

I also believe the low valuation over at car-and-plane-parts builder GKN (LSE: GKN) leaves plenty of scope for an upward share price re-rating in the months ahead.

A predicted 12% earnings ascent in 2017 leaves the engineer dealing on a P/E ratio of just 10.3 times. This is far too cheap given GKN's top-tier status with major OEMs in the automotive and aerospace sectors, in my opinion, a quality that should deliver exceptional revenues opportunities as build rates accelerate in the years ahead.

And in the meantime, GKN is in great shape to ride out current market turbulence as new product launches and the fruits of recent acquisition activity pay off. And earnings should receive a further boost from recently-launched restructuring measures.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK owns shares of GKN. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.