While a lot of FTSE 100 investors are drawn to stocks trading near their 52-week lows, I’m actually more interested in those near 52-week highs. The reason for this is simple – those near 52-week highs are trending up, and share price trends can stay in place for a long time.
Here, I’m going to highlight two Footsie stocks that are currently near their 52-week highs. I own these stocks personally and I’m backing them to climb higher in the months ahead given their strong upward share price trends.
This is now a tech company
First up is London Stock Exchange Group (LSE: LSEG). It ended last week just 1.1% off its 52-week high.
The London Stock Exchange itself might be the main thing that comes to mind when you hear this company’s name. But its operations extend far beyond that today.
Believe it or not, this is actually now one of the world’s premier financial data companies. Currently, it provides data to 99 of the top 100 global banks and 75 of the top 100 global asset managers.
But here’s the thing. Its valuation is relatively low for a financial data company. Currently, the forward-looking price-to-earnings (P/E) ratio is just 24 using next year’s earnings forecast. That’s one reason I’m backing the stock to climb higher.
It’s worth pointing out that a P/E ratio of 24 is high relative to the market average. So, if near-term revenue growth was to come in below expectations, the share price uptrend here could come to an abrupt halt.
Given that the company is shortly about to provide customers with a bunch of new artificial intelligence-powered solutions though, I’m optimistic about its prospects.
Note that Jefferies recently slapped a 11,500p price target on the stock.
An attractive dividend on offer
The other stock I want to highlight is consumer goods company Unilever (LSE:ULVR). It finished last week just 0.7% off its 52-week high.
Now, this stock is on fire at the moment. One reason for this is that the company has a new management team in place. They’re looking to turn Unilever into a lean and efficient company. And recent results indicated that they’re off to a good start, with strong sales from the company’s ‘Power Brands’.
I’m optimistic that the shares can continue to rise from here. And that’s because of the direction of interest rates. You see, in recent years, Unilever’s rock-solid dividend has lost some of its charm because investors have been able to get high rates from savings accounts. With rates likely to fall in the second half of 2024, its dividend (which currently yields around 3.5% and continues to grow at a healthy rate) could come back into focus, pushing the share price up.
I think the big risk with this stock in the near term is a consumer slowdown. After a few years of high interest rates, a lot of people are pretty stretched and looking to save money when shopping.
I have tried a few ‘private label’ products recently though and many have been terrible. So, I’m backing Unilever products to remain popular.
It’s worth noting that analysts at JP Morgan have a 5,100p price target on Unilever. If that target comes to fruition, I could be looking at a return of around 18% when dividends are factored in.
