Shares in FTSE 250 travel retailer WH Smith (LSE:SMWH) fell 7% on Friday (19 December) after the firm reported its 2025 results. It’s been a bad year for the stock, but is it set to bounce back in 2026?

The company has spent the last four months doing a thorough job of tackling its issues and there’s still more to be done. But investors do have reason to be positive in the year ahead.

A turnaround story

Despite an accounting scandal that sent the stock down 34% in a day, WH Smith has had some genuine highlights in 2025. It’s done a good job of focusing its business on travel retail.

To this end, the company has divested its high street stores and online greeting card operation. Both of these look like good moves to me and I think the travel business looks promising.

In the year that ended in August, the company registered overall sales growth of 7% with the majority of this coming from higher like-for-like sales. That’s a decent result.

The accounting irregularity in the US business however, meant profits fell during the year. But investors do at least have clarity about where the company is. 

Where are we now?

In terms of where it’s heading, WH Smith’s guidance is for similar revenue growth and profit margins from the US division are expected to double. Those are encouraging signs. 

It’s worth noting though, that the business has made a slow start to the year. Like-for-like sales growth’s fallen to 3%, led by a weaker performance in UK train stations.

There’s also still some ongoing uncertainty. The company doesn’t have a permanent CEO and it’s a pity Sir Dave Lewis isn’t available – this might have been right up his street.

Investors though, can have confidence in the accuracy of the firm’s numbers and this hasn’t been guaranteed of late. And it’s extremely important from an investment perspective.

Investment analysis?

The latest decline implies a price-to-earnings (P/E) ratio of around 15. There are definitely cheaper retail stocks available, but they generally face higher competitive pressures.

Travel retail’s shielded from a lot of competition from other retailers and – more importantly – e-commerce. That’s why WH Smith has been shifting its focus to this part of the business.

One thing investors can ignore, at least for the time being, is the 5% dividend yield. In its latest update, the company’s cut its final payment by 73%.

This is in line with the firm’s general policy for shareholder returns. But a consequence of restating its earnings over the last couple of years is the dividend is set to fall. 

2026 and beyond

I think 2026 is likely to be a year of consolidation for WH Smith. The issues it’s been dealing with are real and serious and I expect the share price to reflect this.

As a result, I don’t think it’s a top opportunity for investors right now. I own the stock in my portfolio and I’ll be monitoring the situation, but I’m looking at other opportunities right now.

The post Is this FTSE 250 retailer set for a dramatic recovery in 2026? appeared first on The Motley Fool UK.

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Stephen Wright has positions in WH Smith. The Motley Fool UK has recommended WH Smith. 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.

Not every FTSE 100 stock pick can be a winner. I hold around 20 blue-chips and two have suffered: mining giant Glencore (LSE: GLEN) and pharmaceuticals titan GSK (LSE: GSK).

Their shares are down 8% and 12%, respectively, over 12 months. Personally, I’m sitting on paper losses of 16% and 19%, despite picking up a few dividends and yes, it hurts.

While the declines are disappointing, I’m hanging on in the hope of a turnaround. So what are the chances?

Can the Glencore share price rebound?

As one of the world’s largest miners and traders, Glencore’s heavily exposed to the volatile prices of key resources like coal, copper, and zinc.

That was fine when China was posting double-digit GDP growth year after year, while gobbling up 60% of the global supply of metals and minerals. Those days are over and as one Beijing stimulus package after another underwhelms, we can’t assume they’ll come back.

Glencore also has to navigate the pivot towards renewable energy and a low-carbon future. Its substantial coal business remains highly profitable but is at odds with global decarbonisation goals.

President Donald Trump’s mooted tariffs are another concern. The Glencore share price jumped on Friday, along with the commodity sector generally, as Trump (for now at least) adopted a less strident stance. There will no doubt be further twists to come.

The shares look good value trading at 10.5 times earnings while its 2.6% yield may be topped up by one-off dividends in the spring.

The 15 analysts offering one-year share price forecasts have produced a median target of 493p. If correct, that’s a bumper increase of almost 30% from today. I’d hate to miss out if that happens. In a famously cyclical sector, I’d be daft to sell when the shares are down.

Long-term GSK investors can be forgiven for feeling grumpy. The stock’s down 18% on a decade ago. And although investors have received plenty of dividends in that time, they’d have hoped for more. Today’s 4.25% trailing yield’s solid but still below the 6% or so that investors used to expect.

GSK shares are down, but not out

Pouring money into R&D instead was supposed to boost the pipeline and share price. It’s not really happened yet. Spinning off consumer healthcare business Haleon didn’t add much shine to the mothership either.

I thought the GSK share price would rebound last year as it settled a US class action case over heartburn medication Zantac. The relief was short-lived. And with Trump targeting big pharma, investors have another worry.

GSK shares are cheap, trading at 8.8 times earnings, but there’s a lingering suspicion of a value trap here.

The 17 analysts offering one-year share price forecasts have produced a median target of 1,618p. If correct, that’s an increase of almost 19% from today. Combined with that yield, this would give me a total return of 23%. I can’t see it happening, but I’ll hang on just in case.

I could definitely see Glencore rallying hard from here. I think GSK will be a long, slow haul. I continue to hold both but I really should have bought Nvidia.

The post Down 16% and 18% – are my 2 biggest FTSE 100 losers about to rally hard? appeared first on The Motley Fool UK.

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Harvey Jones has positions in GSK and Glencore Plc. The Motley Fool UK has recommended GSK. 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.

2022 has been tough to navigate as a retail investor. The Russia-Ukraine conflict along with surging global inflation has seen many parts of the market depressed this year. However, I’m always keen to remain optimistic. Therefore, with 2023 around the corner, I’m on the hunt for some FTSE 100 stocks I can buy in the New Year and hold for the long run. Here are two I have my eye on today.

GSK

The first is pharmaceuticals giant GSK (LSE: GSK). The stock has struggled lately, down nearly 12% year to date.

However, I think the New Year could be a great time to add the stock to my portfolio. Firstly, GSK has posted strong results so far in 2022. In its most recent update, the business announced sales growth of 9%, up to nearly £8bn. And as a result, the firm raised its full-year outlook, with growth in sales now expected to come in between 8% and 10%. This comes on the back of it already raising its guidance in its half-year update, showing that the business is going from strength to strength.

Elsewhere, I also like the moves GSK has made this year to streamline. The most noticeable of these was the demerger of its consumer healthcare business Haleon. The split will allow GSK to reorganise its operations and place greater emphasis on the development of vaccines and medicines. It also managed to siphon off £7bn in debt as part of the move.

What’s also enticing about the stock is the meaty dividend yield it offers. With a yield of around 7%, this offers me some protection against inflation. As we enter 2023, the passive income stream generated from GSK shares seems to be a smart play.

In the short term, the business could face headwinds such as rising costs as inflation continues to rise. However, for a long-term buy, I like the look of GSK.

SMT

The second stock I like the look of is Scottish Mortgage Investment Trust (LSE: SMT). The trust has seen 40% shaved off its value in 2022 as investors have turned their back on growth stocks.

Despite this, I think Scottish Mortgage could be a solid buy at its current price. The diversity it offers my portfolio is attractive. With over 100 companies under its umbrella, including some unlisted businesses, I gain access to a variety of stocks under one investment.

What I also like is Scottish Mortgage’s investment style. By this, I mean that management buys for the long run. The managers measure performance over a more-than-five-year timeframe. And while past performance is no indication of future returns, the last five years have seen SMT return 77% to shareholders. Impressive.

Inflation will continue to weigh the stock down in the short term. And its heavy weighting in China could see it suffer in the months ahead. However, I believe in the long run that this weighting will bear fruit. I’d be happy to buy in the New Year and hold for a decade.

The verdict

Unfortunately, I won’t have the cash to buy both of these next month. I should have enough to buy one for now, so I’ll probably look to pick up GSK first.

The post I’d buy these 2 FTSE 100 stocks in 2023 and hold them for a decade appeared first on The Motley Fool UK.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Gsk Plc and Haleon Plc. 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.

Navigating markets in 2022 has been far from easy. And as a retail investor, the untold amounts that have been wiped off global markets has made it difficult to know where to put my money. However, I’m staying positive. I think the current market presents plenty of opportunities to buy some shares and hold them for the long run. With this, I’m on the lookout for FTSE 100 stocks I can buy this month.

Here are two I’m considering.

BAE Systems

My first choice is the arms and security business BAE Systems (LSE: BA.). The stock has had a prosperous year, rising over 45% year to date. Over the last 12 months, it’s up an impressive 44%.

The main reason for the rise is the war in Ukraine. While the conflict will have a direct influence in generating business for BAE, it’s also driven defence concerns across the globe. With talks of a ‘new Cold War’, BAE has seen a higher demand for its products.  

The first six months of the year saw the firm’s underlying profits rise by 8.2%. However, what was arguably more significant was the order backlog of £52.7bn, an 18% rise from the same period in 2021.

The stock also offers a dividend yield of around 3.1%. While this isn’t FTSE 100 average beating, the business has looked to increase shareholders’ returns this year, including an increased interim dividend and a £1.5bn buyback programme. These are positive signs.

What could see the business struggle in the months ahead is the higher cost of materials as inflation continues to surge.

However, with a positive outlook for 2022 and beyond, BAE Systems shares look like good value to me.

GSK

The second stock I’m looking at is pharmaceutical giant GSK (LSE: GSK). The multinational healthcare business is best known for offering medicines and vaccines. The stock has fallen over 9% this year. In the last 12 months, it’s down 8%.

This week saw the firm release its Q3 results, where it reported continued strong growth. For the period, sales rose 9% to £7.8bn, including impressive 24% growth in its Speciality Medicines.

The business raised its guidance back in July. However, Q3 has seen it push up this guidance again, with it now expecting growth in sales to be between 8% to 10%.

This continuous growth follows the demerger of its consumer healthcare division, Haleon. The move has allowed GSK to streamline its operations and siphon off debt. And with CEO Emma Walmsley describing the move as undoing the “Gordion knot” that has hampered GSK’s balance sheet, the early signs are that the move is working.

What also draws me to GSK, like BAE, is its dividend yield. This currently sits at around 6.4%. With inflation reaching a fresh 40-year high for September, the passive income generated from this seems like a smart move.

GSK will also likely be impacted by higher costs as inflation continues on its charge. Yet despite this, I see long-term potential.

The verdict

I like both of these stocks. However, I won’t have the cash to buy both in November. I should have enough to buy one, so I’ll probably look to pick up GSK.

The post 2 FTSE 100 stocks I’d buy in November appeared first on The Motley Fool UK.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended GSK plc and Haleon plc. 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.

The UK is in a pickle but that isn’t going to stop me from buying cheap shares. In fact, I see it as a good time to do so.

The FTSE 100 has dropped below 7,000, after the Bank of England’s battles to prevent a pension fund meltdown and another sterling collapse. It trades at 6,913 as I write this, a drop of 7.89% year-to-date.

It has fared better than the US S&P 500, which is down a brutal 24.49% this year. The FTSE 100 is full of solid, undervalued dividend stocks in sectors like banking, utilities, mining, consumer staples and energy. By contrast, the S&P 500 is packed with overvalued growth stocks that are struggling as sentiment plummets.

I’m looking for cheap shares now

Yet the FTSE 100 has dropped far enough to offer me real value. Some of my favourite shares are available at astonishingly low valuations, as measured by the price/earnings ratio.

Anglo American is trading at 4.2 times earnings and yields a staggering 9.54%. That offsets most of this year’s inflation surge. Like any stock, it is not without its risks. The slowing Chinese economy is hitting demand for raw materials. Given today’s dirt-cheap valuation, that is a risk I’m happy to take.

I’m also tempted by housebuilder Barratt Developments, which is valued at a meagre 4.1 times earnings and yields an amazing 10.8%. Again, there’s a reason why this share is cheap.

UK interest rates look set to rise sharply and this will drive up mortgage costs, forcing some owners to sell as they can’t manage repayments. House prices are likely to fall to match the new reality of higher borrowing costs. 

Pharmaceutical giant GSK, formerly GlaxoSmithKline, looks tempting too. Currently, it’s valued at just 11.99 times earnings while its yield has rocketed to 7.12%.

GSK even enjoyed a share price boost this week after its whooping cough vaccine was approved for use in pregnant women in the US. Yet it also faces a specific risk, with a potential $5bn litigation cost for stomach acid treatment Zantac, which may elevate cancer risk. This may not be resolved for several years, weighing on the share price.

FTSE 100 shares at tempting prices

These are big businesses with solid core operations that are astonishingly cheap. That makes me tempted to buy them (although I’ll need to explore GSK’s Zantac issue further).

2022 has been a tough year for markets and the UK now looks set to fall into recession, which could last for all of 2023. Despite all the problems, that won’t stop me from buying shares today for two reasons.

First, wider stock market movements are impossible to predict, so I don’t even try. Second, because I’m investing for a minimum of 15 to 20 years. Over such a lengthy period, any shares I buy today have plenty of time to recover.

The sooner I buy cheap shares like these, the sooner I can start reinvesting their dividends to purchase more stock. By the time the recovery comes, my holdings will be bigger, and with luck I will reap the rewards.

The post Today’s financial crisis is the perfect moment to buy cheap shares appeared first on The Motley Fool UK.

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Harvey Jones doesn’t hold any of the shares mentioned in this article. The Motley Fool UK has recommended GSK plc. 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.

Since Haleon’s (LSE:HLN) demerger with GSK and independent listing on the FTSE 100 last month, its shares have been falling. I can’t help but wonder if the Haleon share price falls into the category of a prime buying opportunity for my holdings with a view to a recovery? Let’s take a closer look.

Haleon share price journey

As a quick reminder, Haleon is now the largest standalone consumer healthcare goods business in the world. This comes after its demerger from global giant GSK. Some of its best known brands are staples in many consumer’s medicine cabinets, mine included, and include Night Nurse, Beechams, Piriteze, and Sensodyne to name a few.

So what’s the current state of play with the Haleon share price? Well, the shares listed last month for a price of 320p per share. As I write, they’re trading for 268p, which is a 16% decline in approximately a month. It is worth noting that the listing was the largest in Europe for close to a decade.

The investment case

Let’s start with some positives around Haleon shares then. I am buoyed by a few key elements. Firstly, the strength and brand power of some of its brands is unrivalled in the consumer healthcare market. These could help boost sales, performance, investor sentiment, and returns in the longer term.

Next, I noticed that a number of insiders have been buying shares since the Haleon share price listed. I find this positive, as who better to attest to the direction and potential of a business than those with an inside track. Haleon Chairman Sir Dave Lewis purchased £200,000 worth of shares just after the listing. Furthermore, two non-executive directors spent approximately £65,000 on shares too.

Finally, Haleon upgraded its forecast for its first full-year update when it released a half-year report at the end of July. The H1 update made for excellent reading, in my opinion. Revenue increased by close to 14% compared to the year previous, driven by organic growth, higher prices, and increased volumes. It also pointed towards the power-boosting performance of certain of its brands, namely Panadol, Advil, and Centrum. However, the positive report did not boost the Haleon share price.

So to some risks associated with Haleon shares then. Firstly, macroeconomic headwinds could have a longer-term impact on results and returns. Soaring inflation, the rising cost of materials, as well as the global supply chain issues could affect profitability and operations.

Next, I’m a bit worried by Haleon’s current debt levels. Debt is usually a red flag for me because it can impact levels of returns and future growth plans. I want to see further results and how the company plans to pay down debt, as well as growth plans to learn more.

What I’m doing now

I do believe that Haleon could be a good stock to buy for growth and returns in the longer term. Furthermore, analysts believe the Haleon share price will recover and increase steadily. I am keen to learn a bit more about the company’s direction, as well as its plan to combat current debt levels in the coming months and updates ahead, however.

The post The Haleon share price continues to fall! Is it now a prime buying opportunity? appeared first on The Motley Fool UK.

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Jabran Khan has no position in any of the shares mentioned. The Motley Fool UK has recommended Haleon plc. 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.

2022 has been a tough time for investors. Markets have taken a beating as new 40-year high inflation levels and global conflicts have dented the economic outlook. Yet despite this, GSK (LSE: GSK) shares have been a beacon of light.

With the FTSE 100 seeing slight losses this year, the GSK share price is up over 8%. The last 12 months have seen the pharmaceutical giant’s stock rising by 24%.

The firm continued this positive momentum yesterday as it released an encouraging set of Q2 results. So, is this an indication I should be buying some shares?

The update

GSK shareholders will be pleased with the update the business provided yesterday.

Beating expectations, the company raised its full-year revenue and profit guidance. It now expects sales to grow between 6% and 8%, up from the prior target of 5%-7%. It also raised its guidance for adjusted operating profit, with it anticipated to come in somewhere between 13% and 15% as opposed to the previous 12%-14%.

A 13% growth in total sales year on year to £6.9bn was fuelled by record sales of its shingles vaccine Shingrix, while it also talked of the global strengthening of its R&D pipelines.

With tough economic conditions, this is a solid set of results.

Haleon spin-off

GSK has also been in the news recently for its recent demerger. Last week, the business split off its consumer healthcare business Haleon. Earning a spot on the FTSE 100, it’s the world’s largest standalone consumer health business.

The move should allow GSK to focus more on long-term developments of vaccines and medicines. And, as an added bonus, it’s also siphoned off a substantial amount of debt in the process.

Many spectators believe that the business has failed to perform in recent times. So this demerger offers an opportunity for it to become more streamlined. CEO Emma Walmsley spoke of the move as “a great catalyst” for a bright future for GSK. She also talked of the “Gordian knot” that has seen the business struggle previously.

While it’s still early for the reborn company, this move seems to make a lot of sense. As a potential investor, this is encouraging.

Is it time to buy?

So, should I be buying GSK shares today? Well, I’m tempted.

Apart from the above, I also like the stock due to the steadiness it can offer my portfolio in these uncertain times. And it’s proved its worth with its performance this year.

The products GSK sells are essential, making it fairly immune to the cost-of-living crisis we’re currently facing.

However, it could suffer should its cost rise as we head further into the year. And with supply chain issues always threatening, this could impact the business.

Despite this, I’d still buy GSK shares today. Its strong results show its resilience. And the demerger should hopefully bring a new lease of life for the firm.

The post After its latest results, are GSK shares a buy? appeared first on The Motley Fool UK.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK 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.

Sareum Holdings (LSE:SAR) shares have been falling for some time now. This is also the case for many other FTSE stocks. At current levels, could the current Sareum Holdings share price be a good opportunity to add shares to my holdings? Let’s take a closer look.

Drug discovery and development

As a quick reminder, Sareum is a drug discovery and development business. It focuses specifically on cancer and autoimmune diseases. Once the drugs are developed, it then licences them to pharma and biotech companies to manufacture on a larger scale and sell.

So what’s happening with the Sareum Holdings share price? As I write, the shares are trading for 175p. At this time last year, the shares were trading for 345p, which is a 49% drop over a 12-month period.

The bear case

Drug development and discovery is a very lengthy and risky process. Aside from the time invested into the venture, there is every chance that the drug in question may not be fit for purpose and lots of time and cash could be wasted. This is a risk for all drug development businesses, and not just Sareum Holdings, however.

Despite the fact Sareum has many approved patents and agreements with licensed pharmaceutical companies, it looks to me like its growth and future pipeline is still very much in the discovery phase. This uncertainty does not sit well with me.

The bull case and my verdict

Looking at more recent events, I noticed that the Sareum Holdings share price did spike in April. I believe this was directly linked to pharma giant GSK purchasing a business that Sareum collaborated with, called Sierra Oncology. Together, Sareum and Sierra created a cancer drug known as SRA737. Some people think that GSK’s takeover could mean significant investment behind the project and that Sareum would benefit financially because of its agreement with Sierra. There is no concrete evidence of this yet, however, and I will keep a close eye on developments.

One thing I did note about Sareum is that, based on its business models and agreements, it doesn’t actually front much cash in drug development projects. Its partners do in most cases. It has also recently been granted patents for some of its other projects such as its SDC-1802 TYK2/JAK1 inhibitor programme. This is linked to protecting any drugs developed to treat acute lymphoblastic leukaemia.

Considering all the pros, cons, and recent events, I would not buy Sareum Holdings shares for my portfolio. Despite some positive events recently, my knowledge of the drug discovery market is limited. In addition to this, the other major factor putting me off is the fact that much of Sareum’s outlook ahead is in the discovery phase and a pipeline in the drug discovery market is not guaranteed.

Sareum is one stock I will put on my watch list and will continue to monitor developments and perhaps revisit in the future.

The post Is the falling Sareum Holdings share price an exciting opportunity? appeared first on The Motley Fool UK.

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• How much do you need an ISA for a £31,352 second income?
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• How I plan to lock in sustainable growth on the FTSE 100 in the coming years

Jabran Khan has no position in any of the shares mentioned. 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.

2022 has proved to be a volatile time for the UK stock market. With a Covid-19 hangover in full swing, and macroeconomic pressures such as inflation, year-to-date the FTSE 100 has fallen by nearly 4%.

With this drop, I’m on the lookout for FTSE 100 shares I can add to my portfolio in July and hold for years to come. Here are two I’d buy today.

Unilever

My first pick would be FTSE 100 powerhouse Unilever (LSE: ULVR). The company owns over 400 household brands, including names such as Ben & Jerry’s, Persil, and Sure. In 2022, the stock is down 5%.

What I most like about Unilever is its strong brand recognition. With a third of the world using its products daily, this gives the firm, to an extent, more pricing power. While the cost of living is increasing, it’s less likely that consumers will cut back on the essential items that the business sells. Chief executive Alan Jope warned earlier in the year of inflationary concerns. However, with a portfolio of well-known brands, I think the firm could fare well against the threat of surging rates.

In its latest results, Unilever also highlighted the start of a €3bn two-year buyback scheme. It began the first €750m instalment of this back in March. And this should hopefully boost the FTSE 100 share’s price in times to come.

My biggest concern with Unilever is its debt, which currently sits at over €25bn. With interest rates rising, this may also make the debt more difficult to eradicate. This could hold the firm back in the future.

However, I still have faith in Unilever. Its strong brand presence and stable nature are key for me in these volatile times. As such, I’d happily add the stock to my portfolio today.

GlaxoSmithKline

My second FTSE 100 buy would be pharmaceutical giant GlaxoSmithKline (LSE: GSK). It’s a healthcare business that offers medicines and vaccines globally.

GSK is similar to Unilever in the steadiness it can offer during stock market woes. And the fact that its share price is up 12% in the first half of 2022 is evidence of this. Healthcare and medicines are a requirement regardless of the economy. This has only been highlighted by the pandemic.

The company also posted some strong results in its latest update. The first quarter saw its sales increase by 32% to £9.8bn. Within this, its biopharma division saw a 40% rise in sales, while its consumer healthcare unit saw a 14% growth.

These impressive results posted by Glaxo may be threatened in the months ahead by headwinds such as supply chain issues and rising costs.

Yet despite this, I would buy GSK today. With economic conditions set to potentially worsen, the pharmaceuticals firm is a useful addition to my portfolio. Its 4.2% dividend yield may also offer me some form of protection against rising inflation in the months ahead.

The post 2 FTSE 100 shares I’d buy in July appeared first on The Motley Fool UK.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline 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.

Many believe that a recession could be on the cards. With that in mind, I am on the lookout for the best FTSE 100 stocks for my holdings.

I have identified two I believe could be great picks. Let’s take a closer look at them.

Healthcare

My first pick is GlaxoSmithKline (LSE:GSK). It is one of the world’s biggest healthcare businesses developing and selling medicines and vaccines with a global footprint.

Healthcare stocks are often seen as recession-proof due to their defensive and essential nature. No matter the state of the economy, people need healthcare and medicines. Furthermore, the pandemic shone a new light on the importance of health and well-being in the past couple of years.

So what’s happening with GlaxoSmithKline shares currently? They’re trading for 1,786p, as I write. At this time last year, the shares were trading for 1,419p, which is a 25% increase over a 12-month period.

Although arguably recession-proof, Glaxo stock does have risks. Current macroeconomic headwinds such as the rising cost of materials and the supply chain crisis could negatively impact operations, performance and returns. These issues are affecting many FTSE 100 stocks, however

As well as GlaxoSmithKline’s defensive capabilities, it has a good track record of performance in recent years. I do understand that past performance is not a guarantee of the future, however. Positive performance and profits leads to investor returns in the form of dividends that could boost my passive income stream. Glaxo’s current dividend yield is 4.3%, higher than the FTSE 100 average of 3%-4%.

I would add GlaxoSmithKline shares to my holdings heading into a recession. Its profile, presence, performance record, as well as the passive income opportunity are too good to miss. It also has an excellent pipeline of drugs, which should support future growth.

Utilities

My next pick is National Grid (LSE:NG). It is the UK’s electricity system operator providing the population with power. In addition to this, in the US it powers 20m customers across Massachusetts, New York and Rhode Island.

Like healthcare, utilities are also often seen as defensive stocks in times of economic uncertainty. Power is one of the modern-day essentials for our homes and businesses after all.

So what’s happening with the National Grid share price currently? Well, as I write, they are trading for 1,080p. At this time last year, the stock was trading for 920p, which is a 17% increase over a 12-month period.

National Grid shares have risks, too. I did notice that it has a significant amount of debt on its balance sheet. Due to rising interest rates, this debt could become costlier to service. In turn, this could affect investor returns and sentiment.

The firm also has a good record of performance. This performance underpins a healthy dividend yield of close to 5%. Utility stocks are often seen as passive income safe-havens. It is worth noting, though, dividends can be cancelled at the discretion of the business at any time. This tends to happen more so during difficult economic periods or extreme events such as a pandemic.

I would happily add National Grid shares to my holdings, and view them as a defensive option for my portfolio for any impending recession.

The post 2 great FTSE 100 stocks to own heading into a recession appeared first on The Motley Fool UK.

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Jabran Khan has no position in any shares mentioned. The Motley Fool UK 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.