Image source: Getty Images
In my opinion, market volatility has provided excellent buying opportunities. Vodafone (LSE: VOD) and National Network (LSE: NG.) there are two FTSE 100 actions that I like. Here’s why I’m considering buying stocks the next time I have some cash to invest.
vodafone shares
Vodafone is one of the world’s leading telecommunications companies, but its shares have fallen 27% in the last 12 months. The shares are trading at 77p as I write, and at 106p at this time last year.
The attractive valuation and juicy passive income opportunity instantly catch my attention. The stock trades at a price-to-earnings ratio of just two! The FTSE 100 average is 14. Next, a dividend yield of 9.9% is attractive. However, I am aware that the yield has increased due to the falling share price and that dividends are never guaranteed.
From a growth perspective, Vodafone has a growing presence in Africa. This could be key to the business reaching new heights as the African telecommunications market is flourishing. With Vodafone’s extensive experience and existing profile, it could become a major player that could drive performance and payments.
However, there are also risks to consider. Vodafone’s growth aspirations could be harmed by geopolitical instability on the African continent. Additionally, when I look at the passive income opportunity, the company has maintained its dividend for a few years, but as the yield does not appear to have increased significantly, this powerful yield could be under threat.
To conclude, Vodafone stock looks great on the surface right now. I am encouraged by its valuation and profitability policy, as well as its growth aspirations. I’ll also keep an eye out for interim results later this month.
National Grid Stock
Like Vodafone, National Grid shares have fallen in recent months. The owner and operator of the UK’s gas and electricity transmission system has fallen 16% in the last six months, from 1,162p in May to 969p as I write. Over a 12-month period, the shares have held steady from 978p to current levels.
The defensive capacity of National Grid catches my attention. As the only operator in your space, you don’t have to worry about competition. This can help keep revenue stable, supporting investor returns. Plus, gas and electricity are essential, so I doubt demand will drop regardless of the economic outlook.
Domestic stocks trade with a price-to-earnings ratio of just under five. Additionally, a dividend yield of 5.6% is also solid and above the FTSE 100 average of 3.9%. Furthermore, analysts believe that performance will only increase in the coming years.
Regulation and maintenance are two big issues that could affect National Grid. Tightening regulation to the detriment of huge profits and investor rewards is a looming specter. Furthermore, maintaining large and extensive essential infrastructure is neither cheap nor easy. Both issues could affect investor confidence and profitability.
Overall, if you ask me, National Grid’s monopoly on what it does, attractive valuation, and passive income opportunity seem too good to miss right now.
