AstraZeneca (LSE: AZN) is a brilliant FTSE 100 lifeboat for these uncertain times.
Drugs demand remains broadly resilient, whatever broader economic conditions are like. This is why City analysts reckon annual earnings at the Cambridge company will keep rising through to the end of 2021 at least. And so the FTSE 100 firm is expected to keep paying dividends of 280 US cents per share through the period, too. This creates chunky 2.6% yields.
The Big Pharma ace isn’t a great pick just for these turbulent times, however. It has a packed product pipeline in fast-growing therapy areas like cardiology and oncology. And it has a terrific record of getting its blockbuster drugs off the shelves without delay. Just today it announced its Lynparza cancer battler and Brilinta heart disease and stroke preventer had received fresh regulatory sign-offs for new applications.
There’s good reason why AstraZeneca is the UK’s most valuable stock with a market cap north of £110bn. It trades on a forward price-to-earnings ratio of around 27 times but in my mind is worth every penny.
More FTSE 100 favourites
You can’t talk about safe haven shares without talking about precious metals producers. The FTSE 100 has two specialists in the production of these most sentimental commodities, too: Polymetal International (LSE: POLY) and Fresnillo (LSE: FRES).
In usual times, share market movements and prices of gold and silver have an inverse correlation. Demand for the flight-to-safety metals dips as appetite for riskier assets like equities improve. And vice versa. But of course these are not usual times. The Footsie, for example, has continued its steady ascent at the start of this week, driven by a further unwinding of quarantine measures in many parts of the globe.
However, buyer interest in bullion has remained robust. Investors have continued purchasing the yellow and grey commodities on the growing social unrest that is enveloping US cities. Of course this is just one issue that is keeping gold sales bubbling along nicely, though.
First of all big questions over the Covid-19 pandemic persist. Global infection rates continue to rise and indeed they are spiking in some parts of the world. There’s a growing chorus from experts predicting a second wave of infections in the autumn. Naturally this leads to speculation that fresh lockdowns may be required in key territories.
On top of this, signs of growing tension between the US and China are causing nerves to shake. It’s massaging concerns over the countries’ trade relations and exacerbating fears over a lengthy and shocking global recession. With this come expectations that central banks will keep cutting interest rates, driving precious metals demand and thus bolstering profits for those FTSE 100 mining giants.
Right now Polymetal trades on a forward P/E ratio of 11 times and carries a corresponding dividend yield of 5%. Fresnillo, meanwhile, doesn’t carry nearly as much value. Its yield sits at around 1.5% for 2020, while its earnings multiple sits above 35 times for 2020. Still, its higher rating could be attributed to the greater scope for gains that silver has versus gold. I’d happily add either of these Footsie firms to my own investment portfolio.
With global markets in turmoil as the coronavirus pandemic tightens its grip, turning to shares to generate income isn’t as simple as it used to be…
As the realities of ‘life under lockdown’ begin to bite, many of the stock market’s ‘go-to’ high-yielding companies have either taken an axe to their dividend pay-outs… or worse, opted to suspended them altogether – for the near-term at least.
With so many blue-chip and mid-cap companies scrambling to hoard cash right now, where are we income investors to turn for decent yields?
Fortunately, The Motley Fool is here to help…
Our analyst has unearthed what he believes could be a very attractive option for income- seeking investors – a company that, in his view, boasts a ‘reliably defensive’ business model, combined with a current forecast dividend yield of 4.2% to boot!*
But here’s the really exciting part…
This business even has form in riding out this kind of situation, too… having previously increased sales and profits back in 2008 and 2009 when the world was gripped in the deepest economic crisis since the Great Depression.
*Please be aware that dividends are variable and not guaranteed.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Fresnillo. 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.