Nothing saved? I’m putting £300 a month into these 2 FTSE 100 stocks

Andrew Woods explains his plan to deploy a monthly sum into FTSE 100 stocks, despite the fact that his savings pot is currently dry.

| 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.

Shot of an young Indian businesswoman sitting alone in the office at night and using a digital tablet

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

With the cost-of-living crisis biting, many investors (including me) have found it difficult to put large amounts of cash away in savings accounts. But from now on I’m going to be very disciplined. I’ve developed a plan to invest a relatively small amount of cash per month in two FTSE 100 stocks. Let’s take a closer look at where I’ll deploy that £300 every four weeks or so.

Profiting from a high oil price

Oil giant BP (LSE:BP) has seen its share price climb by over 14% in the past month. At the time of writing, the shares are trading at 446p.

For the three months to 30 June, the firm reported that underlying profit increased to $8.5bn from $2.8bn during the same period in 2021. In addition, revenue grew by 85% to $69.5bn.

Given these sparkling results, the business announced that it was paying a quarterly dividend of ¢6.006 per share. It’s also embarking on a brand new $3.5bn share buyback scheme, this is another indication that the company is in a strong financial state.

High oil prices essentially increase the value of BP’s produce. There’s risk, however, that this trend begins to fade as the market becomes better supplied with oil. This could lead to inferior future results for the business.

Regardless, BP’s net debt fell from $32.7bn to $22.8bn, year on year, while operating cash flow stands at $10.9bn.

With a total of £1,800 to spend on the shares in this stock per year, I may be able to purchase 400 shares in that time. With the current dividend payment at $0.22, this could give me $88, or £74. That’s equivalent to 4.1% of my initial investment and may be reinvested.

A global brand

Second, shares in Coca-Cola HBC (LSE:CCH) are up 24% in the last three months. For the six months to 1 July, the drinks manufacturer reported that revenue grew nearly 30% to €4.2bn.

Also, operating profit fell by 21.3% to €275.7m. What explains this decline? It was mostly caused by higher costs and the impact of inflation. Additionally, the company decided to suspend operations in Russia following the invasion of Ukraine.

Russia provided a not insignificant proportion of the firm’s sales, so this ceasing of operations naturally had a detrimental impact on revenue figures.

Despite this, investment bank Deutsche Bank upgraded the company, arguing that it still looked cheap. Indeed, it increased its price target from 2,525p to 2,600p.

My other £1,800 could buy me 86 shares in Coca-Cola HBC in a year. With a dividend payment of €0.71, this may equate to a payment of €61, or £51.

Added to the potential payment from BP, this could mean a total annual dividend payment of £125. I could use this to buy more shares in the future, thus gradually increasing my holdings in each stock.

Overall, these businesses could provide growth in the coming months and years. While both face different challenges, I’m quite confident that they can overcome these in the long term. With that in mind, I’m putting my money where my mouth is and investing £300 per month in these stocks.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Andrew Woods has no position in any of the shares mentioned. 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

Middle-aged Caucasian woman deep in thought while looking out of the window
Investing Articles

Should I buy these UK shares for my portfolio?

This Fool has been searching for ways to capitalise on the commodity moves via UK shares. Here’s what he’s watching.

Read more »

Illustration of flames over a black background
Investing Articles

Just released: April’s higher-risk, high-reward stock recommendation [PREMIUM PICKS]

Fire ideas will tend to be more adventurous and are designed for investors who can stomach a bit more volatility.

Read more »

A senior group of friends enjoying rowing on the River Derwent
Investing Articles

£9,000 in savings? Here’s a FTSE 100 stock I’d buy to target a £30,652 annual second income!

Our writer highlights one top FTSE 100 share that he thinks could help create a portfolio large enough for a…

Read more »

Light bulb with growing tree.
Investing Articles

62% down! Is the Ceres Power share price now a green energy bargain?

Annual results from the green energy firm showed a company on the cusp of doubling sales. So why has the…

Read more »

Investing Articles

3 mid-cap UK defence shares to consider buying in 2024

Defence budgets are soaring as global conflicts increase the threat landscape, so I'm examining the value proposition of three defence-related…

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

Hargreaves Lansdown investors have been buying dividend stocks BP and Shell. Should I?

Cherished dividend stocks BP and Shell have outperformed the FTSE 100 index so far in 2024. Paul Summers takes a…

Read more »

Young Asian man shopping in a supermarket
Dividend Shares

A 5% yield? Here’s the 3-year dividend forecast for Tesco shares

Jon Smith flags up the positive momentum for Tesco shares following the release of the full-year results and looks at…

Read more »

Investing Articles

Yields up to 12.3% 3 top shares investors should consider for a second income

Searching for ways to make a market-beating second income? These popular dividend stocks are worth serious consideration, says Royston Wild.

Read more »