3 FTSE stocks I’m watching ahead of the general election

With an election just around the corner, investors are on the lookout for opportunities. I think I’ve found three FTSE companies worth considering.

| More on:
Bus waiting in front of the London Stock Exchange on a sunny day.

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.

As the UK gears up for a general election, savvy investors are scrutinising how potential policy shifts might reshape the economic landscape. While political uncertainty often breeds volatility, it can also unveil intriguing investment opportunities. I’ve got three FTSE stocks on my radar, not just for their political sensitivity, but for their compelling financials and growth prospects.

Barratt Developments

Firstly, Barratt Developments (LSE:BDEV), one of the UK’s largest housebuilders. With housing consistently topping the political agenda, the company’s performance could swing with policy changes.

With a price-to-earnings (P/E) ratio of 8.2 times and a generous dividend yield of 7.8%, the company looks interesting. More intriguingly, a discounted cash flow calculation (DCF) analysis suggests a fair value of £5.60 per share, compared to its current price of around £4.75.

Furthermore, a strong balance sheet, featuring £1.1bn in cash and a low debt-to-equity ratio of 0.05, provides a strong buffer. With a price-to-book (P/B) ratio of 0.8, many investors are will see the shares currently in bargain territory. I have my concerns about the dividend not being covered by earnings, and declining profit margins, though.

The political wildcard? I’m watching for manifesto pledges on planning reform and affordable housing initiatives.


As a major player in the UK’s energy transition, SSE’s (LSE:SSE) strategic pivot towards renewable energy aligns with cross-party commitments to achieving net-zero emissions. This positioning could prove advantageous regardless of the election outcome.

Financially, the firm presents an intriguing profile. Its P/E ratio of 16.5 times is balanced by a healthy dividend yield of 5.5%. A DCF model estimates a fair value of £19.20 per share, suggesting some further growth from its current trading price of around £18.30.

What’s particularly noteworthy is ambitious capital expenditure plans, with £2.5bn earmarked annually for renewable energy projects. This significant investment underscores a commitment to long-term growth in the sector. However, the company has a lot of debt, and the regulated nature of the sector can limit investor returns.

I’ll be watching out for proposed changes to energy price caps and renewable energy incentives.


Ocado (LSE:OCDO) represents a bet on the future of retail and technology. While currently unprofitable, its innovative approach could position it well in a digitally-driven economy.

With a price-to-sales (P/S) ratio of 1.2, the market is already pricing in significant growth expectations. A 10-year DCF model, factoring in ambitious growth projections and margin improvements, suggests a fair value of £7.80 per share, compared to its current price of around £3.10.

The gross profit margin of 33.4% hints at potential profitability as the company scales. Moreover, its substantial R&D spending (£84m in FY2023) underscores a commitment to maintaining a technological edge. However, the shares have seen some major volatility in recent times, and if management fail to execute, investors could be in for a bumpy ride.

Policies affecting digital infrastructure investment and the gig economy could significantly influence growth trajectory.

What’s next?

As the election unfolds, investors will be watching not just the polls, but also how companies adapt to the evolving political and economic landscape. These three FTSE companies offer diverse exposure to key sectors of the UK economy. However, it’s crucial to remember that political events can rapidly alter the business landscape, potentially rendering current projections obsolete. I’ll be keeping all three on my watchlist for now.

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.

Gordon Best 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

Investing Articles

Down 23%! Should I buy more CrowdStrike shares for my Stocks and Shares ISA?

Sometimes bad news can be good news for long-term investors. But is that the case for CrowdStrike in relation to…

Read more »

Investing Articles

2 UK shares near 52-week lows I’m considering snapping up

These UK shares are loitering near, or at, 52-week lows. Are these prime opportunities for our writer to boost her…

Read more »

Investing Articles

Unilever: a passive income stock with potential for decades of dividend growth

Stephen Wright thinks Unilever can keep reducing its share count for years to come. And this should help make it…

Read more »

Middle-aged black male working at home desk
Investing Articles

Worried about retirement? I’d buy high-yield dividend shares to build wealth

The number of pensioners enduring poverty in the UK looks set to rise. Investing in dividend shares could help Britons…

Read more »

Investing For Beginners

2 boring but beautiful FTSE 100 stocks to add to my ISA

Jon Smith runs over a couple of FTSE 100 stocks that he really likes the look of, even though they…

Read more »

Investing Articles

Here’s how I could supercharge my wealth by snapping up the best dividend stocks!

This Fool explains how dividend stocks play a crucial part of her aspirations to build wealth, and details one pick…

Read more »

Young female analyst working at her desk in the office
Investing Articles

Revenue up 10% and accelerated growth potential for this overlooked FTSE 250 company

Today's first-quarter update from this good-value FTSE 250 company keeps me keen on the stock as recovery and growth continues.

Read more »

Investing Articles

Here’s why I’m so bullish about the BT share price now

The BT share price shot up after FY results, and a couple of months on it's still up there. Might…

Read more »