The results are in and the two best FTSE 100 stocks to buy in February were drugs maker GSK (LSE: GSK) and grocery chain Tesco (LSE: TSCO). Both are viewed as solid blue chips, offering steady price growth and a reliable stream of dividends. They’re not expected to shoot the lights out but they gave it a good try last month, climbing 18% and 16% respectively. They’ve been strong over 12 months too, up 48% and 28%, with dividends on top. Can they maintain momentum in March?
I should note that one FTSE 100 stock did outperform them both. Fund manager Schroders ended February 28% higher. That’s because it has been taken over by US institutional fund manager in a £9.9bn deal, which will take it private.
GSK shares fulfilled my hopes
I’m especially pleased with the GSK bounce, having bought the stock 18 months ago when the P/E was around eight. My shares dipped shortly after I bought them, but now I’m nicely in the black. Can it deliver more?
2025 profits, announced on 4 February, saw turnover rise 4% to £32.6bn, with core operating profit up 8% to £9.7bn. Total operating profit nearly doubled to £7.93bn. However, the board warned that growth would slow to between 3% and 5% in 2026. This is due to the expiry of an HIV drug patent and a US pricing deal with the Trump administration. GSK makes more than half its profits in the US.
Risks remain, including US tariffs, and the perennial challenge of slow and costly drug development and potential litigation. There’s also the need to replenish its long-term treatment pipeline. Healthcare is often seen as a defensive sector, but it’s far from risk-free.
Today, GSK is more expensive than when I bought it, with a P/E of 12.6 and a trailing yield of about 3%. I suspect the shares may slow from here but for investors wanting long-term exposure to a key sector, I think it’s worth considering in March.
Tesco has had a good run
Tesco is pricier, with a P/E of 17.5. This is hardly surprising given the shares have flown 115% over five years, with dividends on top. The UK grocer has cemented its market-leading position, with a 28.7% share versus Sainsbury’s at 16.2%. It has shrugged off Aldi and Lidl while absorbing higher employer’s National Insurance and two big living wage hikes.
Food price inflation is now easing, which should help margins and demand. Christmas was a tad disappointing, though. Underlying sales growth slowed, though market share still managed to hit a decade high of 29.4%. Wholesale subsidiary arm Booker is also struggling, but Tesco still expects annual adjusted operating profit at the top of its guidance range of £2.9bn to £3.1bn.
Again, I think Tesco is worth considering with a long-term view. I also think it could slow in the shorter run. Investor expectations are high, judging by that valuation. And while the cost-of-living crisis is easing, shoppers are still under the cosh.
However, rather than chasing past winners, I’ll continue my search for the best FTSE 100 stocks to buy in March. I’ve got a feeling there’s more excitement elsewhere on the index. Bring it on.
