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Everyone remembers their first time, right? I know I remember buying my first FTSE stock as if it were yesterday!
My arms were sweaty, knees weak, arms heavy. Luckily, I didn't get vomit on my sweater, probably because I'm not a fan of spaghetti.
Jokes aside, let's face it, it's a lot easier to buy stocks these days. technology in the world has advanced. It is quite easy to set up a trading account, deposit money and buy shares at the touch of my fingertips using a smart device.
Let's say you were investing for the first time today and you had £1,000 to spend. Would buy National Network (LSE: NG.) and Unilever (LSE: ULVR) shares to get started.
This is why!
What they do
National Grid is the sole owner and operator of the gas and electricity transmission system in the United Kingdom. In simpler terms, it ensures that everyone brings power to their homes and businesses.
Unilever is one of the world's largest consumer brand companies spanning personal care, hygiene, food products and more. It has a huge presence around the world and a wealth of experience behind it.
The case of the bear
It is worth remembering that all actions carry risks.
Looking at National Grid, maintaining such a large, extensive and critical infrastructure is neither easy nor cheap. Problems with this type of effort could affect performance levels, which underpin shareholder returns.
Additionally, the government could intervene and curb the level of dividends and returns that the company distributes to its shareholders. This is because it is a regulated business.
For Unilever, the current inflationary pressures that the global economy is battling are a constant risk. This could hurt the business on two fronts. First, rising costs could reduce profit margins. The other problem is that consumers may look for unbranded items from supermarket disruptors or discount retailers, rather than the premium branded items produced by the giant.
The case of the bull
So the good thing is that National Grid's monopoly and defensive traits mean that revenues are fairly stable. The defensive element comes from the fact that everyone needs energy, regardless of the economic outlook.
If we look at some fundamentals, a dividend yield of 5.3% is attractive. Additionally, the stock trades on a price-to-earnings (P/E) ratio of just five, making it look like good value for money today.
Moving on to Unilever, it is difficult to ignore the sheer brand power and market dominance that the company possesses.
This has helped it become one of the largest companies of its type, backed by a healthy balance sheet and great future prospects. In fact, one of these future perspectives includes a change in its modus operandi. The company is shedding lower-performing brands. You also plan to invest more money in the top performers in your portfolio.
Unilever shares offer a dividend yield of 3.7%. The stock is trading on a P/E ratio of 16, which is not as low as National Grid. However, stocks traditionally trade at much higher prices. It could be a good time to pick up some stocks.
