2 brilliant FTSE 100 stocks for investors to consider buying in July!

The FTSE 100 is full to the brim with exceptional companies. But there are two stocks this Fool likes the look of. Here he explains why.

| More on:

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.

Who doesn’t love FTSE 100 stocks? They offer investors cracking opportunities to purchase high-quality household names and build long-term wealth. That suits my investment strategy down to a tee.

Here are two that have especially caught my eye. I think investors should consider buying them this month.

A homebuilder

The first of my two picks is homebuilder Taylor Wimpey (LSE: TW.). Despite rising 39.1% in the last 12 months, the stock hasn’t performed great so far this year. During the first half of 2024, it lost 1.4% of its value.

Clearly, the stock missed out on the Footsie rally. But I’m not going to complain. I now see good value in Taylor Wimpey.

Its stagnating share price has pushed up its dividend yield. The stock now has the 10th-highest payout on the index at 6.7%. Its dividend experienced a healthy rise last year to 9.58p per share, up nearly 2% from the year prior.

What’s more, after a tough couple of years, there are positive signs starting to emerge from the housing market. Firstly, interest rate cuts seem like they’re getting ever closer. With inflation for May falling to the 2% target, that’ll help. Lower rates will revive people’s appetites for taking out a mortgage and drive demand for Taylor Wimpey.

Looking more long term, it’s no secret that the UK has a major housing shortage. And building more homes has been a major point of discussion in the upcoming election. That’s another reason I’m bullish on the firm.

That said, a delay in rate cuts would harm its share price. In the short term, I suspect the stock may continue to struggle. We’re not out of the woods yet with inflation and a rise over the next few months could see investors turn their backs on Taylor Wimpey.

But as a long-term play, I like the look of its shares. I reckon July could be a smart time to consider getting in and buying the homebuilder.

A supermarket giant

I’ve also had industry giant Tesco (LSE: TSCO) on my watchlist for a while. July could be a shrewd time to consider buying its shares too, in my opinion.

The share price has had a better start to the year than its Footsie counterpart. It’s up 5.1% during that time and 24.8% over the last year.

But trading at 12.6 times earnings, I still think Tesco shares look like value for money. I also like the company due to its incredibly strong brand recognition and dominant market position.

That said, competition is a threat. Aldi and Lidl continue to take the industry by storm and have become even more popular during the cost-of-living crisis due to their budget prices. That’s something to watch.

Yet despite these threats, Tesco has found a way to retain its position at the top. I suspect its smart schemes such as its Clubcard programme, which now has around 20m users, that has kept it there.

There’s also the chance to make some extra cash on the side with its 3.9% yield. That’s above the Footsie average. If I had the cash, I’d snap up both stocks this month.

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.

Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Tesco 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.

More on Investing Articles

Investing Articles

FTSE 100 or S&P 500: where should I invest?

UK investors are often drawn to the high growth of US stocks. But there are pros and cons to be…

Read more »

Investing Articles

2 of the best US growth and dividend stocks to consider!

These heavyweight US stocks have been delivering tasty investor returns for decades. Here's why they could remain great picks for…

Read more »

Investing Articles

I reckon these 2 penny shares are hidden gems worth a closer look!

Some penny shares are well-known, whereas many others go under the radar, but that doesn’t necessarily mean they aren’t potentially…

Read more »

Investing Articles

Just released: our 3 best dividend-focused stocks to buy before August [PREMIUM PICKS]

Our goal here is to highlight some of our past recommendations that we think are of particular interest today, due…

Read more »

Investing Articles

2 FTSE 100 shares with blockbuster yields investors should consider buying

Our writer has noticed that these FTSE 100 shares offer mammoth dividend yields, and reckons investors should take a closer…

Read more »

Stack of British pound coins falling on list of share prices
Investing Articles

Down 36% and yielding 7.8%, is this FTSE 250 share a bargain?

Christopher Ruane looks at a FTSE 250 share with a sizeable dividend yield and a recent record of dividend growth.…

Read more »

Investing Articles

Is Barclays one of the FTSE 100’s best bargain stocks?

Right now, Barclays' shares are cheaper than those of FTSE 100 rival stocks Lloyds and NatWest. So should I buy…

Read more »

Happy young female stock-picker in a cafe
Investing Articles

Is a takeover offer about to boost the Rentokil stock price, and should I buy?

The Rentokil share price is up 10% on takeover rumours. Is it a stock to buy or one to be…

Read more »