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It is too easy to be cautious when it comes to investing during times of economic turmoil. However, two FTSE 100 stocks that I think could be great for investors to consider buying now and for the long term are Taylor Wimpey (LSE: TW.) and Join group (LSE: UTG). This is why!
builder
Taylor Wimpey is one of the UK’s largest housebuilders. Rising inflation, rising interest rates, and a volatile housing market may seem like a cocktail for disaster right now. These issues are affecting many Footsie stocks. However, I think that in the long term, Taylor Wimpey could perform well and generate consistent growth and returns.
Taylor’s stock has gone up and down recently, like an exciting roller coaster. Over a 12 month period they rose 15% from 103p at this time last year, to 119p as I write.
Currently, Taylor Wimpey shares appear to be excellent value for money with a price-to-earnings ratio of seven. Additionally, the business could boost passive income with a juicy 8% dividend yield that appears covered by a decent balance sheet. This return is above the FTSE 100 average of 3.8%. However, it’s worth remembering that dividends are never guaranteed.
It is important to understand that Taylor Wimpey has short-term challenges to face. Rising interest rates have made mortgages harder to obtain, so sales figures could fall. Additionally, rising costs have caused home builders to reduce production as they are spending more to build homes that may not sell immediately.
However, in my opinion, Taylor Wimpey is well positioned for long-term growth. This is because demand for housing in the UK is outstripping supply. With this in mind, once market volatility cools and costs come down and mortgages become easier to obtain in the future, the company could see its performance, payouts and investor sentiment boost. Furthermore, when I take into account Taylor Wimpey’s extensive geographic coverage and market position, there is a lot to like in my opinion.
Student excavations
In my opinion, real estate investment trust (REIT) Unite Group looks like one of the top stocks to consider buying for passive income and growth.
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Over a period of 12 months. Unite shares have remained fairly consistent. As I write they were trading at 957p, this time last year they were trading at 948p, an increase of less than 1%. However, since volatility began to hit the markets, they have fallen 10% from 1,053p in February to current levels.
Starting with the bear case, Unite could experience demand issues if government reforms around foreign student visas are implemented. A recent investigation found large-scale student visa fraud. Any reform could restrict the number of overseas students and in turn harm Unite’s performance and any potential payments.
There are a few reasons why I think Unite stock is looking good. First, REITs must return 90% of profits to shareholders, so the passive income opportunity is attractive. A dividend yield of 3.5% is decent. Next, there appears to be a serious shortage of student places compared to growing demand, meaning Unite can capitalize on this. This could increase performance and potential payouts. Finally, Unite is a name synonymous with student accommodation. Its dominant market position and wide presence could help boost profitability, performance and shares.
