Don’t panic! How I think you can Brexit-proof your shares portfolio with these FTSE 100 dividend stocks
We’re just over four months away from the moment when Article 50 clicks into action and drags the UK out of the European Union.
The situation over how, or even if, the country departs on that date remains as clear as mud. The civil war in the Conservative Party, its fragile alliance with the DUP, the possibility that EU members like Spain may try to veto May’s much-maligned deal with Brussels, all leave a variety of scenarios up for grabs from a no-deal exit to a second referendum being called.
One thing’s for sure: expect more volatility in the weeks and months ahead on the financial markets. And for some FTSE 100 stocks, from UK-focused banks like Lloyds to retailers such as Marks & Spencer, the long-term outlook remains less than robust as the possibility of a cataclysmic EU departure persists.
Medical marvel
But I think a share that’s unlikely to be moved, whichever way the UK deals with the Brexit problem, is AstraZeneca (LSE: AZN).
That’s not to say the medicines giant isn’t immune to any short-term hiccups and like its rivals, it has been stockpiling its products in case of any future supply disruptions into Britain. But this will likely be the beginning and end of its problems — Britons will still need their medicines, regardless of the economic consequences of summer 2016’s referendum, after all.
Anyway, AstraZeneca’s pan-global operations mean that conditions in its UK marketplace aren’t the be-all-and-end-all for the business. Indeed, with sales to emerging markets in particular surging (up 12% in the third quarter) and demand for its new medicines also booming (up 85% in the same period), I believe that the sales outlook is better than its been for many years.
Strike gold
If you’re looking to actively play the Brexit saga rather than avoid it, then I feel Randgold Resources (LSE: RRS) could be a great Footsie stock to buy today as well.
The gold digger’s share price continues to rise on the back of a robust gold price and it hit fresh nine-month highs late this week. As I noted last time I covered the Footsie stock, retail demand for precious metals remains strong at the moment and, added to this, purchases from central banks are also the largest that they’ve been for a very long time.
It could also be argued that, irrespective of how Brexit is finally resolved, having some exposure to gold via either the physical asset itself or by owning companies like Randgold is a good idea given the broad array of geopolitical and macroeconomic uncertainties currently swirling around, from concerns over rising interest rates in the US to slowing economic growth in the eurozone.
But I would much prefer to hold shares in Randgold than the physical metal because of its bumper dividend yields of 4.5% in 2018 and 5.8% in 2019. AstraZeneca is also a great choice for income chasers, in my opinion, in part due to its inflation-beating 3.5% yield through to the end of 2019. I consider both businesses as great shares to buy today and hang on to for long into the future, and not just on account of those bulging medium-term yields.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended AstraZeneca and Lloyds Banking Group. 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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