The Motley Fool

I like these 2 FTSE 100 companies that have good news!

So far 2020 has been filled with doom and gloom, both in the markets and worldwide.

Therefore, it’s nice to read something positive for a change. Two FTSE 100 companies that announced good news this week are housebuilder Berkeley Group Holdings (LSE:BKG) and luxury goods giant Burberry (LSE:BRBY).

Sign up for FREE issues of The Motley Fool Collective. Do you want straightforward views on what’s happening with the stock market, direct to your inbox? Help yourself with our FREE email newsletter designed to help you protect and grow your portfolio. Click here to get started now — it’s FREE!

Shareholders rejoice!

Berkeley has proposed a capital return of £1bn to shareholders over the next two years. This comes as a little more certainty can be afforded to the UK housing market since the Conservative government won the December election.

The past few years have created a volatile operating environment for housebuilders. Berkeley has responded to this with caution and increased its net cash position from £107.5m to over £1bn. 

Focused on the London market, and the South East of England, Berkeley’s focus is building houses to a high standard. Its proposal also outlined plans for a 50% increase in production and delivery in the next six years.

The Berkeley share chart is an encouraging one to look at, showing an upward trend for over 10 years. In fact, it has seen a 40% rise in the past six months and almost 130% over the past five years.

Its price-to-earnings ratio (P/E) is reasonably low at 13 and earnings per share are £4.

The dividend yield is nothing to write home about at less than 1%, but the proposed capital return to shareholders will boost this. I consider Berkeley a buy.

Positive trading update

Since the appointment of a new Chief Creative Officer Riccardo Tisci in March 2018, Burberry’s brand has strengthened.

In its third-quarter trading update, a good performance was noted, thanks to a strong demand for Tisci’s new collections. The company also remains confident in its full-year outlook for 2020 predicting growth of a low single-digit percentage.

Burberry has an £8.7bn market cap, P/E is 25 and earnings per share are 87p with a 1.9% dividend yield.

Competition is always big in fashion, but the Burberry share price has seen a 34% rise in the past two years. It has a British image that exports well overseas and much of its recent success comes from growth in China.  

Reflecting this, it has partnered with Tencent, a Chinese multinational tech conglomerate, to create a digital shopping and socialising experience for its customers, both online and in stores.

With this reliance on international sales though, the FTSE 100 stock is vulnerable to foreign exchange movements. Continuing protests and civil unrest in Hong Kong are also a cause for concern as sales in the area halved in the latest quarter.

China’s recent coronavirus outbreak may also cause a slowdown in Chinese transactions.

Despite these headwinds, I think it has room for future growth. It is a power brand with a rich British history and looking over the past decade, the Burberry share price has risen close to 250%. I see it as a buy.

Long-term gains

It is important to remember that despite all the worrying headlines and forecasts of doom, many companies will thrive. Burberry was founded way back in 1856 and I find it incredible that a clothing brand could survive this long, but survive and thrive it has.

Stock market investing is a long game. Accumulated wealth will come to those willing to display patience and discipline while adhering to a carefully constructed strategy.

A top stock with enormous growth potential

Savvy investors like you won’t want to miss out on this timely opportunity…

Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business.

Not only does this company enjoy a dominant market-leading position…

But its capital-light, highly scalable business model has been helping it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 alone it returned a whopping £151.1m to shareholders in dividends and buybacks!

And here’s the really exciting part…

We think now could be the perfect time for you to start building your own stake in this exceptional business—especially given the two potentially lucrative expansion opportunities on the horizon that our analyst has highlighted.

Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Stock… free of charge!

Kirsteen has no position in any of the shares mentioned. The Motley Fool UK has recommended Burberry. 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.