Since the March share price crash, financial markets have been reeling from the effects of the coronavirus pandemic and the ensuing sense of panic it created. Although global stock markets have risen from their March lows, uncertainty and stress hang over them. Volatility is being seen across all sectors to varying degrees, and no company seems immune to bad news. This makes it difficult for investors to confidently choose stocks to buy. But here are three FTSE 100 stocks I have confidence in and would happily buy, despite Covid-19.
Gold and silver gains
The price of gold is soaring and with geopolitical tensions running high, this is set to continue. In support of this trend, Bank of America raised its 18-month target for gold futures from $2k/oz to $3k/oz. This is based on the reasoning that banks everywhere are having to bail out societies in response to the damage caused by coronavirus. It puts gold miners in a financially promising position.
FTSE 100 stock Polymetal International (LSE:POLY) is a global gold and silver producer with assets in Russia and Kazakhstan. Its portfolio includes nine producing gold and silver mines and several growth projects. The price of silver is also on the rise, so Polymetal is enjoying both its assets shining. Its production and revenues both rose in the second quarter, and it is enjoying significant free cash flow. Its price-to-earnings ratio (P/E) is 25, which is heading for expensive, but considering the upside in the value of gold and silver, I think this is a good buy. It also offers a 3% dividend yield and earnings per share are 78p.
From oil to renewables
Oil major BP (LSE:BP) has been streamlining in response to Covid-19 and the oil price plunge. This is setting it up for a stronger move into renewables and delivering the energy of the future. The BP share price has been rising this week in response. Even with a dividend cut, it still offers a decent yield around 5%.
It has a P/E of 20 and room for future growth. With the price of oil set to make a pretty slow recovery, BP is focusing on building wind and solar farms. It has decades of experience at its disposal and the means to achieve its net zero strategy. I like BP and think it is in an excellent position to meet its green energy goals.
Logistics and distribution
Logistics company Segro has also seen its share price recover since March. Prior to the crash it had been steadily rising for years and recent results show it’s back on track. The £11bn company has a P/E of 12, earnings per share are 79p and it just raised its interim dividend to 6.9p after a run of excellent results. For the first half of 2020 its adjusted pre-tax profit rose 6.5% to £140.4m.
Segro provides prime warehouses in the UK and Europe, perfectly suited to e-commerce ventures. As businesses seek efficient logistical supply chains, the rapid increase in technology adoption has thus benefited it.
I think each of these FTSE 100 stocks would be a positive addition to a value investor’s long-term portfolio. Stock market volatility is likely to continue until we bring the pandemic under control. This may be some time, but these companies look to me as if they’re prepared to weather the storm.
