Image source: Getty Images
He FTSE 100It has been rising in 2024. With a 6.2% increase so far this year, including a 1% increase in May, I am optimistic for June and the months ahead.
As such, I've been tracking the index for potential stocks to rush. Here I leave you two top-quality businesses that have caught my attention. I think investors should consider buying them today.
tesco
My first selection is tesco (LSE: TSCO). Like Footsie, it has had a good start to the year. Its share price has risen 7.2%. In the last 12 months, it has risen an impressive 19.8%.
But I think Tesco stock has more to offer. There are a few reasons why I like it today as a long-term game.
First of all, it is a defensive action. Rain or shine, the demand for the products you sell will always be there. After all, regardless of issues such as difficult economic conditions, people need to eat and drink. We saw the benefit of this in its latest annual results release, where group sales, excluding VAT and fuel, rose 7.2% over the 52 weeks to 24 February.
Of course, it's not as easy as that. And despite constant demand for its products, it has faced competition lately. This largely comes from budget supermarkets such as Aldi and Lidl. In recent years, especially given the cost of living crisis, they have become more popular than ever.
But Tesco remains the largest player in this sector, with a market share of 27.4%. The closest thing to that is Sainsbury's with 15.3%. Its dominant position gives it an advantage over its rivals, such as the ability to benefit from economies of scale.
Additionally, there is also the opportunity to generate passive income with its 3.9% dividend yield. That's just above the Footsie average. For 2023, its dividend increased 11% year-on-year to 12.1p.
GSK
My second selection is GSK (LSE:GSK). It has also benefited from the rally in Footsie, which is up 19.3% so far this year. It has increased 28.7% in the last 12 months.
Like Tesco, I'm bullish on GSK given its defensive nature. The company delivers more than 1.5 million doses of its vaccines each day. As with food and drink, people need medicines and treatments regardless of the performance of the economy.
Apart from that, the stock also offers passive income. Its performance is slightly lower than Tesco's, 3.3%. However, looking ahead, its performance is expected to continue to increase.
I see some risks. First, pharmaceutical companies have to invest millions in R&D to bring drugs and treatments to market, with the risk that they will not pay off. In recent times, there has also been concern about the depth of GSK's drug portfolio.
But as the company recently announced that it has around 90 products in its research and development portfolio, I am sure that in the next few years sales will start to pick up again. What's more, the stock appears to be good value for money and trades at around 15 times earnings. I think now might be a good time to consider buying.
