This year hasn’t exactly been straightforward for investors. The stock market crashed way back in March. Now, after nine months of turbulence, FTSE 100 shares have only just started to show significant signs of recovery.
As that recovery continues, it could be the perfect time to invest in companies that will grow in a post-pandemic world. Here are three FTSE 100 shares I’d buy for 2021.
As would be expected, the easyJet (LSE:EZJ) share price plummeted at the start of the first national lockdown, dropping from 1,506p per share on February 19 to 507p exactly one month later. The airline maintained a similar price until November’s vaccine news guided it to its current price of roughly 850p.
In an ideal world, this will continue to rise as we get closer to the travel industry’s return to normality. However, this could take some time. The company has been hit by a huge £835m pre-tax loss this year and suffers from a current lack of dividend payments. In mid-November, it announced that it will operate at no more than 20% capacity in Q1 2021.
That said, these problems are explainable, understandable, and fixable. CEO Johan Lundgren is optimistic. He claims that the company has “an unparalleled foundation upon which to emerge strongly from the crisis.” This suggests that after a slow period of recuperation, easyJet should be able to return to strength. As such, it is one of my favourite FTSE 100 shares to grab for 2021.
Unlike easyJet, Unilever (LSE:ULVR) hasn’t been impacted drastically by the Covid-19 pandemic. It owns many of the huge household brands (Dove, Persil, Liptons etc) that have been bulk-bought by shoppers this year. As a result, while other FTSE 100 shares plummeted, Unilever rose by 20%. This took it from its yearly low of £40.50, to £48 per share in October.
Roland Head named Unilever as one of his favourite FTSE 100 shares for passive income, and it’s easy to see why. The company has a consistently high profit margin and a notoriously stable dividend. For 2021, its dividend yield is forecast to rise from 3.3% to 3.6%.
I think a long-term investment in Unilever would provide consistent passive income and an opportunity for reasonable future growth.
Back in October, I made my case for investing in the FTSE 100’s biggest supermarket. The day that article was published coincided with its lowest share price of 2020 — 203p. At the time of writing this article, it has risen by 12% to around 225p.
Tesco (FTSE:TSCO) has remained open throughout both lockdowns, and its sales have increased this year. It’s also set to formally complete a deal worth £8bn to sell its Thai and Malaysian businesses on December 18.
Tesco also offers various loyalty-rewarding initiatives and is focusing on expanding its home delivery service. As a result, I’m confident that Tesco can return to pre-pandemic levels while providing a stable dividend.
I think that all three of these FTSE 100 shares are relatively safe investments to make before 2021. Unilever and Tesco are both strong, dividend-paying, long-term investments, and easyJet satisfies my desire for risk while offering the potential for big returns when the aviation industry recovers.
Dan Peeke owns shares in easyJet. The Motley Fool UK has recommended Tesco and Unilever. 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.