If you’re looking to invest £5k in the stock market crash, now could be an ideal opportunity to do so. A fresh sell-off in early May has once again sent the share prices of some top FTSE 100 stocks plunging.
At the moment, a handful of these look like strong buys to me. Provided investors hold for the long term, I think they offer the prospect of attractive returns and sizeable dividend payouts. So, here’s my selection of top FTSE 100 shares for the month of May.
Multinational pharmaceutical company GlaxoSmithKline (LSE: GSK) is on the frontline in the battle against Covid-19. The company recently announced it has joined forces with French healthcare giant Sanofi in the race to create a vaccine.
Whether successful or not, GSK looks well-set to deliver a strong performance this year. First-quarter results were impressive, with group sales rising by 19% to £9.1bn. This was driven by growth across all three of the company’s divisions, with a particularly strong showing from vaccines.
Despite this, GSK’s price-to-earnings ratio sits at a modest 13. For me, this suggests there’s value to be had as I expect high earnings and growth to continue in 2020. For that reason, I think the 4.8% yielding stock is a solid buy this May.
British American Tobacco
Making the jump from medicine to cigarettes, tobacco manufacturing company British American Tobacco (LSE: BATS) is another top FTSE 100 share in my eyes.
The so-called ‘sin stock’ boasts an eye-watering yield of around 7% and has recently pledged to stick to its dividend policy. What’s more, largely thanks to a limited impact on consumer demand, the tobacco company predicts solid earnings growth for 2020.
In line with its target, the FTSE 100 firm forecasts high single figure earnings growth in 2020. This is supplemented by an already strong start to the year, where the company saw its market share rise by 0.2%.
In my view, British American Tobacco’s pledge to stick to its dividend policy is testament to the strength of the company’s financial position. Especially when almost a third of other FTSE 100 companies are cutting or scrapping payments.
A comparatively low price-to-earnings ratio of 9 only sweetens the deal in my eyes. Moreover, steady consumer demand for its products means this company won’t be going anywhere anytime soon.
Consumer goods company Reckitt Benckiser (LSE: RB) has seen its share price bounce back from a 20% plunge in the depths of the market crash to now sit 6% up on the start of the year. I think it’s clear to see why.
Last week, the company raised its full-year outlook after it reported a 12.3% rise in first-quarter sales. The impressive results were driven by an increase in demand for the firm’s hygiene products, which include Dettol, Vanish, and Nurofen.
However, with a price-to-earnings ratio of 18, shares don’t come cheap. That said, my expectations of a bumper performance in 2020, driven by unwavering consumer demand, leads me to believe the figure is justified.
All in all, I think these top FTSE 100 stocks are worthy long-term investments. In my view, investors with spare cash to spend could be well-set to profit in the long run from holding shares in each of these companies as they grow their earnings and consolidate their respective market positions.
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Matthew Dumigan has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. 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.