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Two solid rocks FTSE 100 Index I believe that stocks can offer me good returns and my holdings are GSK (LSE: GSK) and Taylor Wimpey (London: TW.).
This is why I would love to buy some stocks next time I have cash to invest.
GSK
In my opinion, GSK is one of the leading companies in the pharmaceutical sector and offers excellent defensive characteristics, due to the cutting-edge technology it produces with medicines and treatments to help the world cure itself from various diseases.
Last month, a Delaware judge ruled in favor of more than 70,000 lawsuits being filed against the company. This was related to the GSK lawsuit. Zantac The drug and its possible links to cancer. Although GSK denies any evidence suggesting a cancer risk, the possibility of significant fines and reputational damage is a risk I will be monitoring closely.
From a bullish perspective, and given the defensive aspects mentioned above, I think there are many positive things about the business.
For starters, the stock is currently trading at a price-to-earnings ratio of 14. Forecasts suggest it will also fall further, but I understand that forecasts don't always come true.
Moreover, GSK shares offer a dividend yield of 3.9%, which is in line with the FTSE 100 index average. I believe that this dividend will also grow in the future, based on the company's reputation, experience and future project pipeline. It is worth mentioning that dividends are never guaranteed.
Overall, an established name in the market, an attractive valuation, a passive income opportunity, and what looks like a solid R&D pipeline with over 90 products to come, help me make an investment decision today.
Taylor Wimpey
Homebuilders have not fared well over the past 12 to 18 months due to economic volatility. Higher inflation, interest rates and the cost of living crisis have hit profits and confidence.
Inflation levels have come down and rumours of a possible interest rate cut could be good news. A possible property boom could be on the horizon. However, economic problems are one of the biggest risks for Taylor Wimpey and something that could dent earnings and returns. For example, higher costs could mean tighter margins and profit levels. I will be keeping an eye on this.
If a property boom is on the horizon, Taylor Wimpey is well positioned to benefit. At the moment, the stock looks attractive to me.
Taylor is one of the UK’s largest property developers. It has a wide presence, as well as a wealth of experience and a strong track record. This could stand it in good stead at a time when there is a housing crisis in the UK. With demand outstripping supply, there is an opportunity for the company to capitalise and increase its profits and performance.
Finally, the fundamentals also look good to me. Taylor has a healthy balance sheet, which can help avoid economic turbulence and support growth. In addition, the stock offers a dividend yield of 6.6% and trades at a price-to-earnings ratio of just 14.
