2 ‘no-brainer’ FTSE 100 stocks I’d buy on the dip

The FTSE 100 has fallen recently to around 7,000 points. Here are two FTSE 100 stocks I’m buying now to capitalise on this slight dip.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

After hitting post-pandemic highs in August this year, the FTSE 100 has corrected slightly in recent days. This has seen it fall to around 7,000 points. But I feel that this slight correction gives me the opportunity to pick some FTSE 100 stocks on the cheap. Here are two companies I’m particularly interested in buying more of right now.

Packaging company

Over the past month, Mondi (LSE: MNDI) has fallen around 10%, currently priced at 1,880p. But I think this is a great time to buy the packaging company on the dip. Here’s why.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

Firstly, the company’s half-year trading update was positive. In fact, it reported revenues of over €3.6bn, an increase of 5% from the same period last year. It also generated operating profits of €503m, which although marginally lower than the same period last year, represents a strong performance.

This good performance also enabled the company to declare an interim dividend of 20 cents, an increase of over 5% from last year. As such, Mondi has a full-year dividend yield of nearly 3%. Although this is by no means incredible in comparison to other FTSE 100 stocks, it’s still an appealing aspect of the company.

Furthermore, the dividend is extremely sustainable, and covered over two times by earnings. This allows plenty of money for investment, and Mondi is doing just that. This has included a €125m investment into its mill in Kuopio, which will increase its capacity by 55,000 tonnes per annum. It’s said that this has been done to “meet growing consumer demand”. As such, I feel that profits will be able to increase over the next few years.

As such, even though rising input costs and planned maintenance factory closures are headwinds moving forwards, I think the outlook remains positive. That’s why I may add more Mondi shares to my portfolio.

A defensive FTSE 100 stock 

BAE Systems (LSE: BA) is the other FTSE 100 stock I think is a ’no-brainer’ buy. The defence specialist has proved extremely resilient during the pandemic, and while other companies recorded huge losses last year, BAE was able to see its operating profits rise 2% in the period.

The company’s strong performance has continued this year. In fact, in its half-year results, operating profits were 60% higher than the same period last year at £1.3bn. As such, operating profits for 2021 are expected to be far higher than last year. Underlying EBIT, a key measure of profitability, is also expected to increase around 7%. This has enabled the firm to increase the dividend by 5%, giving it a strong yield of 4.5%. It has also initiated a share buyback programme of up to £500m.

Accordingly, I feel like BAE can overcome the challenges that it faces, namely the fact the US defence budget increased just 1.6% this year, far lower than inflation. A price-to-earnings ratio of around 12 also shows that the firm is not overpriced, especially as it’s not currently seeing falling profits. Therefore, this is another FTSE 100 stock that I may add more of to my portfolio.

One FTSE “Snowball Stock” With Runaway Revenues

Looking for new share ideas?

Grab this FREE report now.

Inside, you discover one FTSE company with a runaway snowball of profits.

From 2015-2019…

  • Revenues increased 38.6%.
  • Its net income went up 19.7 times!
  • Since 2012, revenues from regular users have almost DOUBLED

The opportunity here really is astounding.

In fact, one of its own board members recently snapped up 25,000 shares using their own money...

So why sit on the side lines a minute longer?

You could have the full details on this company right now.

Grab your free report – while it’s online.

Stuart Blair owns shares in BAE Systems and Mondi. 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.

More on Investing Articles

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

This cheap share fell 30% last week. I’d buy now

This huge US corporation saw its shares crash by 30% last week. But I'd buy this surprisingly cheap share now…

Read more »

Various denominations of notes in a pile
Investing Articles

These 7 shares produce passive income of 7% to 11% a year!

Passive income is extra money I make without working. By buying these seven shares, I could earn 8.9% a year…

Read more »

A person holding onto a fan of twenty pound notes
Investing Articles

6.6%+ dividend yields! 2 FTSE 100 dividend stocks to buy

Finding the best dividend stocks to buy requires extra care today as soaring inflation takes a bite out of shareholder…

Read more »

Arrow symbol glowing amid black arrow symbols on black background.
Investing Articles

At 85p, are Rolls-Royce shares a slam-dunk buy?

The Rolls-Royce share price is in penny stock territory. Roland Head explains why he thinks this FTSE 100 stalwart looks…

Read more »

Business development to success and FTSE 100 250 350 growth concept.
Investing Articles

‘Big Short’ investor Michael Burry is buying this quality growth stock! Should I?

In the first quarter, Michael Burry bought more of this growth stock. Is this a hint that I should also…

Read more »

A beach at sunset where there is an inscription on the sand "Breathe Deeeply".
Investing Articles

Stock market crash: here’s why falling prices is good news

Over in the US, a stock market crash is battering high-priced stocks. But I see falling shares as an opportunity…

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

These 5 FTSE 100 shares crashed in 2022. I’d buy 1 today

Although the FTSE 100 index is flat in 2022, some Footsie shares have crashed hard this year. But I see…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

How investors can boost their passive income when the FTSE is falling

Stock markets are plagued with fears right now. Here's why I firmly believe those fears improve our passive income prospects.

Read more »