To the lifeboats! 3 FTSE 100 stocks I think are perfect for volatile times like these
Arguably, there’s no better stock to have in your shares portfolio when financial markets are rocking than National Grid(LSE: NG)
This notion is underlined by the fact that its market value swelled 5% in October when the FTSE 100 sank 5% over the same month. It doesn’t matter what political or economic turbulence we face from a domestic or international basis, we need power to boil the kettle, keep the television running and turn the lounge lights on, and thus I believe National Grid remains an essential entity for us.
And unlike electricity suppliers like Centrica or SSE, the company has a monopoly on keeping Britain’s pylons and substations up and running, giving its profits outlook that little extra strength. A forward P/E ratio of 14.3 times makes National Grid a steal for this sort of earnings protection, in my opinion.
Needless to say this visibility gives also gives the business the sort of confidence to keep raising dividends, as over the long-term, earnings are likely to keep rattling higher. As a consequence, last year’s payout of 45.93p per share is anticipated to rise to 47.3p in the year to March 2019 and again to 48.7p the following year, figures that create huge yields of 5.8% and 5.9% respectively.
The gold standard
Fresnillo (LSE: FRES) is another Footsie firm that has thrived in recent weeks, its share price having grown 3% over the course of October.
Earlier this year, gold and silver values couldn’t escape the broader weakness across the commodities suite as a whole thanks to the dual blow of a rising US dollar and the intensifying battle lines between Washington and Beijing regarding trade.
However, the eternal reputation of precious metals as great rush-to-safety assets came to the fore once again last month as risk appetite drained out of the investment community. Gold jumped to three-month highs above $1,230 per ounce and this dragged Fresnillo’s stock price higher too.
The silver digger sports a forward P/E ratio of 20.5 times, but I believe this is a price worth paying to give your investment portfolio a little added protection against further market volatility.
Another 5%+ yielder
If you want to get the most bang out of your buck and are looking for big dividends to go with your safety, then I think GlaxoSmithKline (LSE: GSK), like National Grid, cannot be faulted.
Medicine makers are a natural attraction during times of market volatility thanks to the indispensable nature of their products and their pan-global operations. GlaxoSmithKline’s share value may have slipped 2% last month but it held its value better than most of the FTSE 100 thanks to these qualities. What’s more, I am tipping it to rise in the months and years ahead as its new blockbuster drugs enter the market (this week it upgraded its adjusted earnings growth target for 2019, to between 8% and 10%, at constant currencies on the back of new medicine launches).
But back to those dividends: City analysts are forecasting a reward of 80p per share this year and 80.3p for 2019, projections that yield 5.3% and 5.4% respectively. Throw in a prospective P/E multiple of 13.4 times and I reckon the pharmaceuticals play is a brilliant blue-chip to load up on.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK has recommended Fresnillo. 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.