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2 FTSE 100 stocks I’d buy in December

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The FTSE 100 has had a good run recently. Yet as we begin December, there is still plenty of value to be found within the index.  

Here, I’m going to highlight two FTSE 100 stocks that I believe look attractive right now. In my view, both of these stocks have the potential to provide investors with healthy gains over time. 

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This FTSE 100 stock just got a boost from Boris

Defence giant BAE Systems (LSE: BA) is one FTSE 100 stock that I believe offers tremendous value at the moment. Earlier in the year, its shares were trading near 670p. Today however, they can be picked up for around 500p – more than 25% lower.

I think this share price fall is overdone. I say so because this year, BAE has held up well. In its half-year results, posted in late July, the company reported a 5% increase in revenue. Meanwhile, in November, the company said that demand for its capabilities remains high. Order intake expectations are ahead of its original pre-coronavirus planning for the year.

Looking ahead, I think BAE is well placed to continue growing. Recently, the UK government announced that it will spend an extra £16.5bn on defence in the next four years in order to modernise the UK’s armed forces. A chunk of this money, which is set to be spent on robots, autonomous systems, and cyber security, should find its way into BAE’s coffers. Turning to the US, BAE says that its portfolio remains well aligned to customer priorities and growth areas. It expects this to continue under a Joe Biden administration.

BAE Systems shares currently sport a forward-looking P/E ratio of just 10.3. The prospective yield on offer is about 4.7%. Given these attractive metrics, I see the stock as a buy.

A play on Nike and Adidas

Another FTSE 100 share I’d buy in December is JD Sports Fashion (LSE: JD). Pre-Covid-19, it was trading at 870p. However, today, the shares can be picked up for around 775p.

There are a few reasons I’m bullish on JD Sports. The first is that sales of athletic footwear globally are surging. Between now and 2025, the market is expected to grow at over 6% per year. This should provide tailwinds for JD.

The second is that sales of both athleisure clothing and loungewear are also booming. Over the next five years, the global athleisure market is predicted to grow at around 8% per year, driven by the increasing focus on health. Meanwhile, the global loungewear market is expected to grow by around 9% per year in the next few years, driven by the work-from-home trend. JD, which specialises in these styles of clothing, should benefit from this growth.

Its revenues and profits are expected to take a small hit this year due to Covid-19. However, business is expected to pick up next year. Currently, analysts expect sales to grow 12% next year and net profit to increase 58%.

JD Sports shares currently trade on a forward-looking P/E ratio of 20 using next year’s EPS forecast. I think that’s good value. I’d buy this FTSE 100 stock today.

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Edward Sheldon owns shares in BAE Systems and JD Sports Fashion. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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