Image Source: Getty Images
I hope to receive some funds soon which I plan to use to invest in more UK stocks. Should I buy these inexpensive? FTSE 100 actions to increase my passive income?
glencore
While the FTSE index soared in early 2023, index miners have endured a more turbulent ride. Recent data out of China suggests that these blue chip stocks may be on the brink of a rally, prompting me to consider buying. glencore (LSE: GLEN) shares.
China’s official manufacturing Purchasing Managers’ Index (PMI) soared to 52.6 in February, beating brokers’ forecasts. Any reading above 50 indicates expansion, and last month’s was the highest since 2012.
Factory activity is picking up after the pandemic shutdowns end at the end of 2022. This bodes well for commodity giant Glencore, which produces and markets metal and energy products.
Today, the company trades with a forward price-earnings (P/E) ratio of 6.7 times. It also has a powerful dividend yield of 9.5%. I think these readings make Glencore stock a great buy for lovers of value stocks.
Earnings from mining stocks can fall during economic downturns. But I expect gains here to soar in the long run as the energy transition accelerates demand for materials like copper.
Industry body CRU believes that demand for the red metal, a key revenue driver for Glencore, will rise by 2.1% a year to reach 28.5m tonnes by 2030. In this environment, investors like me could see returns amazing.
barclays
main street bank barclays (LSE:BARC) also offers an attractive mix of low earnings multiples and huge dividend yields. It is trading at a price-earnings ratio of 5.5 times for 2023 and has a corresponding dividend yield of 5.3%.
One thing I like about the company is its huge investment bank. Compared to retail competitors like lloyds and NatWest, this poses greater risk to investors. However, this also has the potential to generate much higher returns than its rivals.
Still, this is not enough to tempt me to consider buying Barclays shares. The UK economy is faltering and the bank is facing a sharp and sustained rise in bad loans. Booked £1.2bn in credit impairment in 2022, £500m of which came during the last quarter.
There are also big questions about its net interest margin (or NIM) in the future. This measures the difference in what banks charge borrowers to borrow and what they pay depositors in interest.
On the one hand, key policy makers at the Bank of England appear to be shutting down talk of further interest rate hikes. The bank’s governor, Andrew Bailey, has said that the further increases are “not inevitable”. Your lieutenant governor has commented that policymakers should “prevent the possibility of doing too much” on interest rates.
Second, there is increasing pressure on banks to improve the rates they offer to savers. This week, the chairman of the Finance Committee suggested that “our biggest banks are taking advantage of their most loyal customers to boost profits and CEO pay”.
In short, I would avoid Barclays stocks and use my money to buy other UK stocks like Glencore.
var config = {
apiKey: ‘1ed121d592e04642d57912bb369ef696621661a3’,
product: ‘PRO_MULTISITE’,
logConsent: false,
notifyOnce: false,
initialState: ‘NOTIFY’,
position: ‘LEFT’,
theme: ‘DARK’,
layout: ‘SLIDEOUT’,
toggleType: ‘slider’,
iabCMP: false,
closeStyle: ‘button’,
consentCookieExpiry: 90,
subDomains : true,
rejectButton: false,
settingsStyle : ‘button’,
encodeCookie : false,
accessibility: {
accessKey: ‘C’,
highlightFocus: false },
onLoad: function () { // hide Cookie Control recommended settings button.
var recommendedSettingsButton = document.getElementById(‘ccc-recommended-settings’);
if (recommendedSettingsButton) {
recommendedSettingsButton.classList.add(‘hide’);
} },
text: {
title: ‘Privacy Notice’,
intro: ‘This site uses cookies, pixels, and other similar technologies to improve your web site experience and to deliver you personalised ads about our own and third party products and services. Please read more about how we collect and use data about you in this way in our Cookies Statement in our Privacy Policy. You can change your cookie settings in your browser at any time. ‘,
necessaryTitle: ”,
necessaryDescription: ”,
thirdPartyTitle: ‘Warning: Some cookies require your attention’,
thirdPartyDescription: ‘Consent for the following cookies could not be automatically revoked. Please follow the link(s) below to opt out manually.’,
on: ‘On’,
off: ‘Off’,
accept: ‘Accept’,
settings: ‘Cookie Preferences’,
acceptRecommended: ‘Accept Recommended Settings’,
notifyTitle: ‘Privacy Notice’,
notifyDescription: ‘This site uses cookies, pixels, and other similar technologies to improve your web site experience and to deliver you personalised ads about our own and third party products and services. Please read more about how we collect and use data about you in this way in our Cookies Statement in our Privacy Policy. You can change your cookie settings in your browser at any time. ‘,
closeLabel: ‘Save Preferences and Close’,
accessibilityAlert: ‘This site uses cookies to store information. Press accesskey C to learn more about your options.’,
rejectSettings: ‘Reject All’,
reject: ‘Reject’,
},
branding: {
fontColor: ‘#fff’,
fontFamily: ‘Arial,sans-serif’,
fontSizeTitle: ‘1.2em’,
fontSizeHeaders: ‘1em’,
fontSize: ‘1em’,
backgroundColor: ‘#313147’,
toggleText: ‘#fff’,
toggleColor: ‘#2f2f5f’,
toggleBackground: ‘#111125’,
alertText: ‘#fff’,
alertBackground: ‘#111125’,
acceptText: ‘#ffffff’,
acceptBackground: ‘#111125′,
buttonIcon: null,
buttonIconWidth: ’64px’,
buttonIconHeight: ’64px’,
removeIcon: false,
removeAbout: false },
necessaryCookies: ( ‘wordpress_*’,’wordpress_logged_in_*’,’CookieControl’,’PHPSESSID’,’fivc’,’fivs’,’fivp’,’Ookie’,’Fool_subinfo’,’_gads’,’_gid’,’_gat’,’_ga’,’__utma’ ),
optionalCookies: (
{
name: ‘Sharing’,
label: ‘I would like content tailored to my personal preferences.’,
description: ‘We work with advertising partners to show you ads of products and services you may be interested in. You can choose whether or not to have ads delivered in a personalised way by setting this option. You can return to review this setting at any time by clicking the "C" logo in the bottom left corner of any page.’,
cookies: ( ‘_ga’, ‘_gid’, ‘_gat’, ‘__utma’, ‘_gads’ ),
onAccept: function () {
// Add Facebook Pixel
!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;
n.queue=();t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)(0);
s.parentNode.insertBefore(t,s)}(window,document,’script’,
‘https://connect.facebook.net/en_US/fbevents.js’);
fbq(‘init’, ‘901682110316659’);
fbq(‘track’, ‘PageView’);
fbq(‘consent’, ‘grant’);
// End Facebook Pixel
// Enable Google ad personalization
// gtag (‘set’, ‘allow_ad_personalization_signals’, true ) ;
},
onRevoke: function () {
fbq(‘consent’, ‘revoke’);
// Enable Google ad personalization
// gtag (‘set’, ‘allow_ad_personalization_signals’, false ) ;
},
recommendedState: ‘on’,
lawfulBasis: ‘consent’,
},
),
statement: {
description: ”,
name: ”,
url: ‘https://www.fool.co.uk/help/privacy-and-cookie-statement/’,
updated: ”
},
};
CookieControl.load(config);