I think there are currently some incredible bargains to be found in the FTSE 100. With that in mind, here are three blue-chip stocks I would buy today with £3,000.
FTSE 100 income
The first company on my list is Imperial Brands (LSE: IMB). Due to its association with the tobacco industry, this business might not be suitable for all investors.
However, looking past the ethical considerations, this business is a cash cow. Analysts are forecasting total income of £2.3bn for this year, enabling the group to distribute 140p per share in dividends. This implies the stock could yield nearly 10.2% this year.
That said, this is just a forecast. There’s no guarantee the FTSE 100 company will be able to hit this dividend target. There are plenty of risks to profitability. The group has a considerable level of debt, and due to the health implications of smoking, regulators worldwide are trying to reduce consumers’ consumption of cigarettes.
Still, I would buy the company today based on its income potential for the year ahead, despite these risks and challenges.
HSBC (LSE: HSBA) is another company I would buy for my portfolio. Bank share prices have been decimated over the past year as profits have collapsed, and regulators have blocked dividend payments to investors. But I think investor sentiment could change over the next few months.
As the global economic recovery starts to gain traction, banking groups like HSBC stand to benefit more than most. Rising demand for banking products such as loans should produce higher profits and increase profit margins from the low levels reported for 2020.
Unfortunately, the economic recovery is not guaranteed. If there’s another wave of the virus, banks like HSBC may report increased loan losses. Regulators may also move to restrict dividends once again. These challenges may impact investor sentiment towards the business, which I will keep in mind going forward.
Income and growth
The final company on the list of FTSE 100 shares I would buy today is the asset management group M&G (LSE: MNG). In my opinion, this is another recovery play. As the economic outlook improves, the corporation should benefit from increased investor inflows and rising stock markets.
This could lead to significant returns for shareholders. In its short life, M&G has always been happy to return large amounts of cash to investors. For this year, analysts forecast a dividend per share of 17.5p, down marginally from last year’s level of 18.2p. If the company hits this projection, it could yield nearly 8% in the current financial year. Of course, these are just forecasts and should be taken with a pinch of salt. They show the corporation’s potential but do not guarantee returns.
Two main risks are facing the business. Another economic slowdown could hurt its asset management performance, and bigger competitors may draw customers away with lower fees. The company will always face these challenges, so that’s something I’m going to keep an eye on as we advance.
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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended HSBC Holdings and Imperial Brands. 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.