2 top FTSE 100 stocks for investors to consider buying in December

Stephen Wright has two FTSE 100 stocks to consider buying in December. One is a recovering growth stock, the other is a dividend stock at a 52-week low.

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A positive month for the FTSE 100 means bargains are harder to come by in December. But I think there are still a couple of opportunities for investors looking for stocks to buy before the end of the year.

Rightmove

The Rightmove (LSE:RMV) share price is up by 10% over the last month. But it’s still 17% short of its 52-week high.

The business is basically a cash machine – it generates £198m per year in free cash using £10.5m in fixed assets. That means it doesn’t take much capital to run, so the cash it makes can be returned to shareholders.

The biggest risk with Rightmove shares is the threat of competition. With rival OntheMarket being acquired by CoStar Group, there’s a threat to the firm’s dominant market position.

Rightmove’s management seems unconcerned by this, though. Earlier this week, the company announced that it is targeting £420m in operating income by 2028.

If that happens, then I suspect the stock is going to go higher. If the company’s earnings hit £420m and the share price doesn’t move, it will be trading at a price-to-earnings (P/E) ratio of around 10. 

That looks unlikely to me, so I would expect a price increase. And the company’s ongoing share buyback programme should provide an additional boost for the stock.

As a result, the stock is top of my list of FTSE 100 stocks to buy in December. I see this as an opportunity to buy shares in a quality company at an unwarranted discount.

Unilever

Unilever (LSE:ULVR) is a very different type of stock to Rightmove. But I think looks like an equally good investment at the moment. 

Following a 10% drop since the start of the year, the Unilever share price is at a 52-week low. At the moment, the stock trades at a price-to-earnings (P/E) ratio of just over 13. 

Management is forecasting 3%-5% annual sales growth as well as some margin expansion going forward. If the business can achieve this, I think the stock could be a nice passive income investment.

That won’t be entirely straightforward. Recently, Unilever has found that increasing prices to protect its margins has caused sales volumes to decline.

There’s a risk that persistent inflation could challenge management’s forecasts going forward. But I think the business has a good strategy to deal with this.

Instead of looking to boost growth by shifting its product range, Unilever looks set to invest in its existing brands. To me, this looks like the right approach.

Opportunities to buy consumer defensive stocks at reasonably low multiples don’t come around often. So I think investors should seriously consider Unilever shares while the price is relatively low.

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.

Stephen Wright has positions in Unilever Plc. The Motley Fool UK has recommended CoStar Group, Rightmove Plc, and Unilever Plc. 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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