2 top quality FTSE shares I’m watching like a hawk

This Fool has his eye on these two FTSE stocks. Here he explains why he’d buy them today if he had the cash.

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I always keep my head on a swivel for my next potential buy. And right now, I see a number of FTSE shares that look like they could be cracking additions to my portfolio.

Here’s one FTSE 100 and one FTSE 250 stock I’d love to buy today if I had the cash.

Games Workshop

The first is Games Workshop (LSE: GAW). After posting a strong 8.3% gain last year, the stock has kept up its form in 2024. Year to date, it has climbed 7.3%.

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Created with Highcharts 11.4.3Games Workshop Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

The business has experienced major growth over the last decade. However, it has no plans to slow down. Last year, the firm posted its best-ever results. For the 53 weeks ended June 2, revenue grew 11.1% to £494.7m while earnings per share climbed 11.9% to 458.8p per share. That’s impressive given the tough trading conditions we’ve faced.

I’m excited by the moves the firm has made to grow its licensing business. Its largest collaboration in this space has come with Amazon. Last year, Games Workshop announced a deal with the tech giant that will see its Warhammer universe turned into a string of TV and film content.

With over 200m people using Amazon Prime, that will expose the brand to a vast number of potential new customers.

Games Workshop is the clear leader in the miniature wargames market, which is another reason I’m a big fan. However, I am wary of rising competition. As the industry becomes more popular, it’s very likely that more players will enter the space.

But with its loyal customer base, I’m still backing Games Workshop. With its strong growth in recent years, the firm is also eyeing expansion into North America and Europe.

National Grid

I’m also keeping a close eye on National Grid (LSE: NG.). The stock has had a turbulent year. After taking a 20% hit back in May, it has staged a decent recovery. Year to date, its shares are up 6.7%.

Created with Highcharts 11.4.3National Grid Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

There are a couple of reasons I’m drawn in. The first is its chunky dividend yield. As I write, it yields 5.5%. That’s above the FTSE 100 average of 3.6%.

There’s a caveat though. Its payout will fall in this financial year to March 2025 after the business announced a 7-for-24 rights issue earlier this year. This move will increase share count and therefore dilute shareholders returns. That said, it’s still set to stand at around 5%.

On top of that, I like National Grid for its defensive nature. The business keeps Britain powered and that means it often provides stable revenues. Over the last five years, the stock has been a strong performer on the FTSE 100, returning 27.8%.

The rights issue it announced in May was the catalyst behind its steep share price decline. And it does pose a risk to National Grid. Say the business doesn’t see the return on investment it has set out to achieve? That could see its share price suffer. Restructuring often comes with these sorts of threats.

But while it may lead to short-term volatility, I think it could be a great move in the long run. With the money it raises, National Grid is aiming to invest £60bn into its operations over the next five years.

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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.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Amazon and Games Workshop Group 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.

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