It’s said the summer can be a quiet period for the stock market. But that hasn’t been the case for FTSE shares over the last couple of weeks.
But with all the recent volatility comes great opportunities for investors like me who buy stocks with the aim of holding them for the long run.
I hope to have some investable cash this month. I plan to pick up both of these stocks.
M&G
The first is M&G (LSE: MNG). Its share price performance has been disappointing. It’s down 9.2% year to date and 8% in the last six months. But now at 203.6p, I’m eyeing the FTSE 100 constituent.
I’d be lying if I said I wasn’t drawn in largely by its thumping 9.7% dividend yield. The business went public in 2019. Since then, it’s increased its payout every year.
Dividends are never guaranteed, of course. However, M&G’s said before it has plans to maintain the trend of upping its dividend. That’s exciting.
There are other reasons I like the look of its shares as well. For example, they’ve an attractive valuation. The stock trades on 16.4 times earnings. That seems like decent value. However, it trades on just 8.5 times forward earnings. That looks dirt cheap.
I’ve tried to make investing as simple as possible in recent years. I target well-known companies that operate in big industries with large customer bases. M&G, with over 5m customers in the financial services industry, ticks all of those boxes.
There are a couple of risks I see. The first is the current economic environment. High interest rates are a big threat as is lingering inflation. Both weaken investor sentiment. This can lead to customers pulling money from funds. There’s also the risk of competition.
But M&G has a strong position in the market. And for a long-term buy, I like the look of the stock today.
Taylor Wimpey
Homebuilder Taylor Wimpey (LSE: TW.) is also on my Buy list. The stock’s soared in the last year, rising 34.7%, including 8.8% this year.
But I reckon it’s got more to give. The property market’s struggled in the last couple of years but we’re starting to see more positive signs come out of it. In its half-year update, the firm raised its full-year house completion guidance.
That’s not to say it won’t face challenges in the months ahead. While the Bank of England cut the base rate earlier this month, rates remain high. We’re expecting further cuts in the months to come but a delay would likely negatively impact the Taylor Wimpey share price.
That said, there’s plenty to suggest the business could thrive in the coming years. It’s no secret there’s a housing shortage in the UK and the Labour government has set out to fix it. That’s why over the next five years it’s pledged to build 1.5m new homes.
To go with that, the stock looks good value, trading on 13 times forward earnings. There’s also its 6.1% yield to consider.
