FTSE 100 incumbents Centrica (LSE: CNA), B&M European Value (LSE: BME), and Associated British Foods (LSE: ABF) have had a good 2023. I reckon more of the same is on the cards in 2024. Here’s why I’d buy some shares when I next can!
Centrica
Over a 12-month period, Centrica shares are up 53% from 91p at this time last year, to current levels of 140p, as I write on Monday, 18 December.
The business has benefited from the ongoing spike in energy prices, which it has passed on to its customers. Prices and supplies of oil as well as natural gas have risen due to a variety of factors. This has helped the business boost its coffers.
Centrica shares look great value for money on a price-to-earnings ratio of just over two. Plus, a dividend yield of 2.3% would help boost my passive income. However, it’s worth remembering dividends are never guaranteed.
As gas and electricity is essential, it gives Centrica some defensive ability, in my eyes. However, if the price of oil and gas were to drop sharply, profits and payouts could be hurt. Plus, investor sentiment hasn’t been overly positive due to a cost-of-living crisis and bills soaring well above pre-pandemic levels.
B&M
B&M shares are up 43% over a 12-month period. As I write, they’re trading for 562p. At this time last year, they were trading for 391p.
I reckon B&M will continue its forward march based on the current economic outlook. Even if things get better, there will always be a market for lower income consumers to frequent discount retailers like B&M, if you ask me.
The firm has been acquiring failing businesses, strengthening its store presence and footprint, and also investing heavily in its infrastructure. All these aspects will continue to set it in good stead, in my opinion.
The shares look fairly priced on a P/E ratio of 15 and offer a yield of over 6%. However, as with any business that regularly undertakes acquisitions, I’ll keep an eye out because one bad acquisition can undo all the great work of previous ones that helped boost growth!
Associated British Foods
The owner of many food brands and Primark has seen its shares do well in 2023. They’re up 52% over a 12-month period from 1,553p at this time last year, to current levels of 2,368p.
Trading on a P/E ratio of 17, I reckon the shares look ripe for the picking! They may not be the cheapest but I understand you may need to pay a fair price for a quality company. Plus, a dividend yield of 2.5% would also help boost my passive income stream.
I reckon macroeconomic volatility has probably prevented ABF shares from soaring further. For example, rising costs can take a bite out of profits, which underpin payouts and growth plans. This is a risk I’ll keep monitoring in its future updates.
Despite a tough economic picture, ABF’s brand power and wide footprint has seen the firm perform resiliently. I’m excited about where the shares could go once volatility subsides.
