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2 London-listed stocks I’d buy

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One stock that’s caught my eye is global nutrition group Glanbia (LSE:GLB). It’s enjoying a surge in growth as consumer trends in health, wellness and nutrition gain prominence. The group sells the Optimum Nutrition and SlimFast brands, as well as a popular vitamin and mineral premix. It also has a dairy division, sports nutrition, and speciality non-dairy ingredients. It’s a €4bn company based in Ireland.

Glanbia share price activity

The Glanbia share price has risen 34% year-to-date and is now trading at €14 a share. But it’s down 25% from early 2019. It fell back then after global trade wars impacted earnings. And the share price drop was exacerbated further by Covid-19.

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The company has been growing through acquisitions, which continue to improve its future potential. And it’s particularly seeing strong growth across e-commerce. This gives it confidence that its adjusted earnings per share growth will be at the upper end of the growth range it predicted.

But it’s not all rosy. Glanbia has seen a drop in revenues from cheese and it’s also facing a legal dispute over the construction of a new cheese factory in Ireland to which it will supply milk. The National Trust for Ireland (An Taisce) is against the new build for environmental reasons. As the country is trying to reduce emissions to meet the Paris Agreement, they argue a new factory won’t help.

Last month the High Court supported the Glanbia factory build, but An Taisce is appealing this decision.

Would I buy shares in Glanbia?

Glanbia’s price-to-earnings ratio (P/E) is 17, earnings per share (EPS) are 79c while the dividend yield is 1.7%. Between 2015 and 2019, the Glanbia share price consistently sat above where it is today. I think this shows strength and resilience.

I’m tempted to buy shares in Glanbia because it’s providing many of the consumer goods people want today. Nutrition has never been more on the minds of consumers and I think this trend will continue.

Further focus on health and nutrition

The other stock I like is Tate & Lyle (LSE:TATE). It supplies food and beverage ingredients to industrial markets.

As I noted above, there’s a clear trend that consumers want to be healthier, and Tate & Lyle’s got the expertise to make processed foods healthier. Last month Tate announced it’s looking into selling a controlling stake in its commercial sweeteners unit. This would allow it to focus more closely on healthier products through its food and beverage solutions unit. This division makes texturants, stabilisers and low-calorie sweeteners.

I think this seems like a sensible focus for the group and it could benefit shareholders long term. In the past three years, the Tate & Lyle share price has risen 33%. Historically it’s been a volatile investment, but the dividend helps long-term shareholders withstand the low points. It was relegated from the FTSE 100 to the FTSE 250 in 2014 for the 12th time in 23 years. It’s not yet made it back in, but streamlining the business seems like a good way to improve its prospects.

Tate & Lyle has a price-to-earnings ratio (P/E) of 13 and earnings per share (EPS) are 52p. Its dividend yield is around 3.6%.

Glanbia and Tate & Lyle are two stocks I’d buy to follow the health and wellness trend and the e-commerce rise. I own Tate & Lyle shares and would be happy to add more to my Stocks and Shares ISA.

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Kirsteen owns shares of Tate & Lyle. The Motley Fool UK has recommended Glanbia. 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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