The stock market’s been taking a hit as a result of the coronavirus pandemic, despite yesterday’s partial recovery. For investors, especially for those getting started in investing for the long term, a market drop can be a great opportunity to take advantage of price levels not seen in years. Today I’d like to discuss why I’d still continue to buy into London Stock Exchange shares and emphasise two that may be worth your attention if you’re ready to invest now.
The LSE is important
First a bit of terminology for those who are just getting started. The London Stock Exchange (LSE) is the primary exchange in the UK and the largest in Europe.
The most famous index in the UK is the FTSE 100. Most companies it contains are multinational conglomerates. The components of the index are reviewed quarterly.
The FTSE 250 index consists of the 101st to the 350th largest companies listed on the LSE. Companies in it usually have a more domestic focus so they’re more directly affected by shorter-term developments in the UK economy.
Market crashes can be unnerving. But eventually stock prices stabilise and good companies begin to grow their earnings again. Therefore, I think that investing, and staying invested, in robust LSE shares makes sense even during the current market volatility.
Mondi
Paper and packaging group Mondi (LSE: MNDI) has operations across more than 30 countries and multiple industries. This LSE member manages forests, produces pulp, paper and plastic films. And it offers industrial and consumer packaging solutions worldwide.
The company also finds itself in a strong position to help customers “transition to more sustainable packaging — paper where possible, plastic when useful”.
Year-to-date, MNDI shares are down over 25%. Yet I’m ready to suggest that the growth in e-commerce, especially during this lockdown period globally, will likely benefit the business of the FTSE 100 constituent in the coming months.
In late February, the group released full-year results for the year to December 2019. Mainly due to weaker paper prices, it delivered flat earnings. However, management offered a brighter outlook with price stability ahead.
Chief executive Andrew King highlighted a “solid operational performance, strong cost control and a good contribution from acquisitions and capital investment projects”.
At present, the business provides investors with a robust 6.5% dividend yield and the stock is expected to go ex-dividend in early April.
Moneysupermarket.com
Price comparison specialist Moneysupermarket.com (LSE: MONY) is part of the FTSE 250 index. Its website markets financial products such as insurance, credit cards, loans, mortgages, and utilities. Consumers can also monitor their credit scores online.
We’re facing a complete lockdown in the foreseeable future. So I’d expect a good number Britons to spend more time on comparison shopping for financial products. After all, we’re looking for ways to make good use of our time at home.
And given the economic uncertainty faced not only by countries, but also understandably by households, many consumers would like to save money. That applies whether they’re looking to buy insurance, change energy providers, or tap a new line of credit with a credit card or loan.
In 2020, MONY shares are down about 24%. Yet the falling share price of this LSE member now means a an enticing dividend yield of 4.7%. Its ex-dividend date of 2 April is coming up.
