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3 FTSE 100 stocks to watch for in September

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A number of FTSE 100 companies are due to release results in September. They’re coming at a critical time when we’re starting to see what our post-pandemic economy is going to look like. Here are three I’ll be paying close attention to, from three very different sectors.

Fears of a housing slowdown have been growing for months, though the nation’s housebuilders haven’t been seeing it yet. What will the outlook be like for Barratt Developments (LSE: BDEV)? We’ll have some idea on 2 September, with results for the year to June.

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The company’s most recent update in July reported “strong demand across the country” and “excellent recovery of completion volumes.” Barratt completed 17,243 homes in the year, which is close to 2019’s figures.

Profits were expected to be at the top end of the range of market expectations. The company reckoned on year-end cash of around £1,315m too. That’s way above the £766m held at the end of June 2019. And I’m keen to hear what the company plans to do with it. It did say it “continues to recognise the importance of dividends to all shareholders.”

We’re a couple of months on from that statement now. So I also want to know if there’s been any sign of softening in the market in the early days of the 2021/22 year.

FTSE 100 engineering

Smiths Group (LSE: SMIN) suffered a hefty crash early in the pandemic. The price has been recovering, but it went off the boil a bit over the past month or so. At the time of writing, the engineering group’s shares are sitting on a two-year loss of around the 15% mark. The FTSE 100, meanwhile, is very close to break-even.

The latest drop appears partly due to the company’s agreement to sell the bulk of its healthcare division, Smiths Medical, for $2.5bn. Smiths should receive net cash of approximately $1.8bn (£1.3bn) from the sale, which looks good in these tough times. It says it “will be used to support investments in growth and enable a significant return of capital to shareholders.

Smiths isn’t exactly known as a big dividend payer, with yields in recent years ranging 2.6-2.8%. And judging by the market reaction, shareholders aren’t overjoyed by the potential outcome of this sale. We should know more on 28 September when Smiths delivers full-year results.

High street bounce-back

One of my FTSE 100 high street favourites is due to reveal first-half figures on 29 September. I’m talking about Next (LSE: NXT), which has adeptly managed its mix of conventional store and online fashion retail for years. That helped the company through the lockdown days, and its shares have gained more than 30% over the past two years.

The most recent trading update in July was positive. Full-price sales for the 11 weeks to 17 July were 18.6% ahead of the same period two years previously (compared to pre-pandemic levels). Next lifted its full-year pre-tax profit guidance by £30m to £750m. The company expects to have around £240m in spare cash to return via special dividends too.

My fear though, is that the Next share price might be a touch overheated now as some competitors are only just getting their sales back on track. So I’m wondering if we might be in for a slow period for the stock.

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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Next. 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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