Tesco

Supermarket titan Tesco (LSE: TSCO) reveals its latest set of full-year numbers on 13 April. The shares are down 6% so far this year. That’s hardly great. However, it’s clearly far better than the performance of other members of the FTSE 100. 

Regardless of what happens next month, I continue to rate Tesco highly as a core holding if I were looking to build a defensive portfolio with an income bent. The shares have a forecast yield of 3.9% — slightly higher than that of the FTSE 100 as a whole. 

Naturally, the supermarket space isn’t going to become any less competitive. The rise in the cost of living could push more shoppers in the direction of German discounters Aldi and Lidl. Global food supply disruption due to the Russia/Ukraine conflict is another potential headwind.

However, with 20 million households signed up to its Clubcard loyalty scheme helping to keep the checkouts ringing and a huge market share, this is easily the least risky listed firm in the space, in my opinion. I think existing holders can sleep easily. 

Rio Tinto

Mining giant Rio Tinto (LSE: RIO) was one of my five stocks to buy for 2022. Since the beginning of the year, its share price has climbed 18%. Pleasing as that is, I wonder if there might be more gains ahead. The company is down to release an operations review for the first quarter on 19 April.

Even if Rio’s news doesn’t lift the share price further, I still reckon this is a great stock to buy for two reasons. First, it’s a dividend machine. Right now, the stock has a forecast yield of 10%! Second, the switch to renewable energy sources, while gradual, is unstoppable. That means huge demand for the sort of metals that the top-tier company digs up. 

As things stand, Rio’s shares trade at seven times earnings, which is average for its sector but cheap relative to the rest of the market. Then again, investors need to remember just how volatile commodity prices can be. So while I think that Rio remains a good stock to hold, I’d always make sure I was fully diversified across other sectors before pulling the trigger.

Smith & Nephew

It might not grab the headlines compared to other FTSE 100 stocks but I continue to be interested in acquiring a slice of medical devices firm Smith & Nephew (LSE: SN).

As a result of the Covid-19 pandemic, a lot of elective surgery was postponed. This inevitably impacted trading at the company, sending the share price firmly lower. Now that Covid-19 is no longer grabbing the headlines and restrictions have been lifted, I think a recovery could be on the cards. 

The elephant in the room for me right now is the valuation. A P/E of 19 isn’t cheap, although this should fall as business bounces back. However, there’s nothing to say the stock won’t fall lower between now and then on general market concerns or any potential coronavirus comeback.

I’ll be reading the Q1 trading update — due to land on 28 April — with great interest.

The post 3 FTSE 100 stocks I’ll be watching in April appeared first on The Motley Fool UK.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Smith & Nephew and Tesco. 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.

Today, I’m looking at what could be three of the best shares for me to buy before July starts. Why before July? Well, all of the companies highlighted below are down to provide updates to the market next month. And, based on what they had to say earlier in 2021, I think there could be more good news ahead.

Watches of Switzerland

Luxury watch retailer Watches of Switzerland‘s (LSE: WOSG) share price has climbed almost 200% since last June due to strong trading. That’s despite store closures and much-reduced travel and tourism due to the pandemic.

Back in May, WOSG reported a 3.6% rise in sales in the UK where it’s the largest retailer of major brands such as Rolex. An “outstanding result” was also achieved in the US.

I doubt momentum has reversed in the last couple of months. In fact, sales are already expected to grow 16-21% in FY22 as people treat themselves to a new timepiece with lockdown savings. Factor in more airport sales as restrictions are lifted and WOSG’s shares could continue rising after the full-year numbers are confirmed on 8 July.

On 26 times earnings for FY22, the shares certainly aren’t cheap. Some may also feel that the good news is priced in for now. As a long-term investment, however, I continue to regard WOSG as an attractive option for growth investors such as myself.

Howden Joinery

A second stock that could see further positive momentum in July is kitchen supplier Howden Joinery (LSE: HWDN). It reports half-year numbers on 22 July.

Howden’s shares are already up 48% over the last year, supported by the recent boom in home improvement. Back in April, the company reported a 13.1% rise in revenue for Q1 compared to 2019 (the year before the pandemic kicked off). 

Of course, property owners may choose to spend their money on other things once Covid-19 restrictions are completely lifted. Moreover, we don’t know for sure whether the working-from-home trend will truly last. 

Even so, I wouldn’t be inclined to sell based on the valuation. A P/E of 24 is undoubtedly steep. However, this isn’t too lofty for a company that consistently generates great returns on the money it invests. Howden also has the sort of solid balance sheet I look for when hunting for the best shares to buy and hold for the long term so I’m watching it closely. 

Smith & Nephew

A final stock I think could be worth me picking up before next month is medical equipment company Smith & Nephew (LSE: SN). Half-year results from the FTSE 100 member are due on 29 July. 

In contrast to the other stocks mentioned, SN’s share price has barely climbed at all over the last year. Nevertheless, I think this could be set to change as postponed elective surgeries are finally allowed to proceed. Indeed, the company highlighted “improving visibility” back in April. A strongly rebounding Chinese market also gave us insight into how the company’s earnings in other parts of the world may fare post-pandemic.

Once again, there are no guarantees. There could still be a few chapters left in the Covid-19 tale left to unfold. Investors could be left waiting longer for that recovery if the Delta variant proves more problematic. Like the other stocks mentioned here, SN’s valuation of almost 25 times earnings doesn’t scream value either. But I’m considering this one.

The post 3 of the best shares to buy before July appeared first on The Motley Fool UK.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Howden Joinery Group and Smith & Nephew. 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.

Today, I’m looking at two examples from the top tier. As luck would have it, both reported on trading this morning.  

Smith & Nephew

FTSE 100 medical technology company Smith & Nephew (LSE: SN) is first up. By contrast to other members of the index, its share price is still far off its pre-Covid-19 highs. Based on the reaction to today’s Q1 statement, I think time could be running out to acquire this company at a good price.

[fool_stock_chart ticker=LSE:SN)

At $1.13bn, revenue over the three months to 3 April came in 11.5% higher on a reported basis compared to the same period last year. While some of this is the result of currency tailwinds and input from acquisitions, CEO Roland Diggelmann reflected that surgery volumes were “moving towards more normal levels in many markets.“

Importantly, all three of S&N’s franchises (Orthopaedics, Sports Medicine & ENT and Advanced Wound Management) have bounced back to growth. Tellingly, a strong rebound in revenue in the Chinese market gives some indication of how business in developed markets might perform once Covid-19 is defeated. 

Interestingly, S&N chose not to alter its 2021 guidance on revenue growth and profit margin today. I think this is prudent. After all, operations and treatments could still be impacted by a significant third wave in 2021, highlighting that no FTSE 100 stock is devoid of risk

With talk of “improving visibility” however, I’m tempted to believe we could begin to see the S&N share price really recover from here as postponed elective surgeries get the green light. A price-to-earnings (P/E) ratio of 24 looks punchy, but not after the potential growth is factored in. I’m sorely tempted to pile in. 

Flutter Entertainment

To label gambling firm Flutter Entertainment (LSE: FLTR) a recovery play may sound strange. After all, its share price has already climbed 65% over the last year. 

[fool_stock_chart ticker=LSE:FLTR)

However, like S&N, I’m inclined to think we could see more gains ahead, especially once the sporting calendar gets back to normal and retail betting outlets and stadiums are allowed to reopen.

Again, like S&N, today’s Q1 trading update made for very pleasant reading. Total revenue rose 32% to £1.49bn over the first three months of 2021. Unsurprisingly, the vast majority of this was online where player growth of 36% was also recorded. 

Unlike its FTSE 100 peer, however, this news hasn’t been quite so well received. To me, this suggests that a lot of positivity was already priced in. After all, the betting operator’s shares were already changing hands for 50 times earnings.

A predicted rise in UK coronavirus infection rates may have brought forth some profit-taking. Investors  may also speculate that people will be less inclined to place bets if they’re concerned about where levels of employment might be going once the full economic cost of the pandemic is realised.

That said, I think I’d be tempted to buy some Flutter today and add in bouts on any weakness. The growth opportunities, particularly in the US, are hard to ignore. Moreover, a price/earnings-to-growth (PEG) ratio of 1.4 isn’t excessive. Anything below 1.0 tends to be indicative of good value.

The post 2 shares to buy for the FTSE 100 recovery appeared first on The Motley Fool UK.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK owns shares of Flutter Entertainment. The Motley Fool UK has recommended Smith & Nephew. 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.

A far better move in my book is to focus on those companies with decent growth prospects, brands, and/or a large addressable market. These are the stocks that stand a better chance of rebounding in time. And if you’ve got many years of investing ahead of you, where better to stash them than in a tax-efficient Stocks and Shares ISA?

Here are three examples from the top tier that catch my eye as potentially great buys for the eventual recovery.

An ageing world

Smith & Nephew (LSE: SN) specialises in making medical devices. More specifically, it produces hip and knee implants, products to help with fractures and bone deformities and instruments to repair and remove soft tissue. With populations ageing, I think this makes it an ideal candidate for a long-term ISA hold.

In addition to its growth potential, Smith & Nephew also has a presence in more than 100 countries around the world. This makes it very geographically diversified and, consequently, a safer pick than more domestically-focused FTSE 100 companies. Its balance sheet also looks pretty solid to me. 

Like most, shares in Smith & Nephew have rebounded strongly since mid-March. Whether this positive momentum can be sustained remains to be seen. As a racier alternative to more income-focused healthcare stocks, however, I think it takes some beating. 

Growth play

Corrugated packaging firm DS Smith‘s (LSE: SMDS) share price wasn’t exactly in sparkling form before the coronavirus crisis. That said, I think this could prove another great buy for the future.

Smith’s packaging solutions are used to move food and personal care items to supermarket shelves or deliver goods to customers’ homes. Coronavirus hasn’t stopped this, suggesting that earnings should stay fairly stable. Factor-in the ongoing explosive growth of e-commerce and holders of the stock should be sitting pretty for many years to come.

Like Smith & Nephew, DS Smith has a wide geographical spread. It operates in 37 countries around the world. It’s also a nice play on the sustainability trend. The business is looking to manufacture 100% reusable or recyclable packaging by 2025.

Firms operating in dull industries rarely hit the headlines. They do, however, have a habit of generating great returns over time. I think this could prove to be the case here.

FTSE 100 stalwart

And finally, Diageo (LSE: DGE). Pubs and restaurants may still be closed but this hasn’t turned us into a nation of teetotallers. Indeed, supermarket sales of alcohol jumped last month as people were forced back into their homes for their own safety.

Will this be sufficient to offset the damage caused to revenues by the lockdowns for firms like Diageo? It’s unlikely. Nevertheless, the fact that demand hasn’t dried up means it’s likely to be in a better place post-coronavirus compared to index peers making hardly any money. 

Markets could be set for a further leg downwards but I wouldn’t dissuade anyone from building a stake as things are. Diageo’s share price remains roughly 25% lower than the highs hit in August last year. That feels an attractive entry point for the owner of established brands such as Guinness, Smirnoff and Captain Morgan.

The post 3 FTSE 100 growth stocks I’d buy for the recovery appeared first on The Motley Fool UK.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Diageo and DS 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.

Growth Story

Smith & Nephew’s one of the biggest players in the realm of artificial joints and limbs, advanced wound care, and has an increasing role in the world of surgical robotics.

Profits have been pressured more recently because of subdued demand in Smith & Nephew’s core US marketplace, and looking ahead, the trouble created by trade wars threatens some more stress across both its developed and emerging markets. This is why City analysts are expecting fractional bottom-line growth in 2019.

That said, I consider this Footsie share’s long-term growth outlook to be mightily compelling. In particular, a combination of exploding global population growth and rising healthcare spend in bright new markets like China promises to drive profits at this Footsie firm skywards in the years ahead. The number crunchers expect things to start rolling with annual earnings expansion revving to 7% in 2020.

Valuation

Now the medical giant certainly appears a tad expensive on paper, its shares trading on a forward P/E ratio of 22 times compared with the accepted value benchmark of 15 times and below. A high price has been created by Smith & Nephew’s electric price run over the past 12 months (it’s up 66% as I type) which leaves it trading at record highs.

Balance Sheet

It’s got plenty of financial firepower right now to keep growing dividends and to continue making earnings-boosting acquisitions as well. Cash conversion stood at a mighty 85% in 2018, whilst its net debt-to-adjusted EBITDA ratio stood at just 0.8 times.

And the business remains extremely proactive in putting that balance sheet to work by making some significant acquisitions. It made yet another move on this front earlier in July with the takeover of Switzerland’s Atracsys Sàrl, a maker of optical tracking technology that’s used in computer-assisted surgery.

Dividend Policy

The healthcare giant doesn’t have the most storied of dividend policies on the FTSE 100, however.

Firstly, its decision to freeze the full-year payout in 2016 means it doesn’t have the longest-running progressive policy out there. Secondly, dividends at Smith & Nephew haven’t exactly flown higher in recent times, the annual sum rising a mere 3% last year to 36 US cents per share.

And lastly, whilst Smith & Nephew’s expected to keep its recent run of dividend rises going — City analysts anticipate a payout of 38 US cents this year and 41 cents in 2020 — those chunky share price gains of the past year leave yields for these years sitting at 1.7% and 1.8% respectively.

It’s a buy!

It’s clear that, on paper at least, Smith & Nephew doesn’t provide an abundance of bang for your buck, either in terms of earnings multiple or dividend yield.

But there’s a reason why investors have been piling into the business en masse in recent months: its rising might in a white-hot medical segment and a resumption of brilliant profits growth in emerging regions. So forget about its high price, I say. I reckon this FTSE 100 favourite has all the tools to provide stunning returns in the years ahead.

The post Have £3k to spend? A surging FTSE 100 stock I’d buy right now appeared first on The Motley Fool UK.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK 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.

Medical devices

Smith & Nephew (LSE: SN) makes medical devices such as joint implants, instruments, bits and pieces used to stabilise fractures and items for advanced wound care among other things. Demand has been consistent and growing for years, which has led to a decent record of dividend growth. Over the past five years, the dividend has risen by around 34%.

At the beginning of May, the firm updated the market by saying it made a good start to the year and is “building momentum through broad-based organic growth and acquisitions.” Meanwhile, the recent share price close to 1,675p throws up a forward-looking price-to-earnings (P/E) rating of just under 20 for 2020 and the anticipated dividend yield is around 2%.

The valuation isn’t low, but I reckon Smith and Nephew’s steady, cash-generating characteristics justify a fuller rating. I’d be tempted to make the stock one of my core portfolio holdings.

Fast-moving consumer goods

Reckitt Benckiser Group (LSE: RB) manufactures health, hygiene and home products and owns brands such as Dettol, Durex, Nurofen, Scholl, Gaviscon, Finish and Calgon. Stable incoming cash flow tends to be a feature of the business and the dividend has risen around 26% over the past five years.

At the start of May, the firm said it had seen a slow start to the year, but expected improving growth during the second half of the year. Chief executive Rakesh Kapoor plans to retire at the end of 2019 and the company is looking for a successor. Kapoor has been at the helm for more than eight years and has spent more than three decades with the company overall. I’m a big fan of periodic change at the top in a firm because it can bring in renewed drive, determination and enthusiasm, which could help drive operations forward.

The recent share price of 6,405p puts the forward-looking P/E rating at around 17.5 for 2020 and the anticipated dividend yield is about 2.9%. I think the firm’s consistent cash flow justifies the full-looking valuation.

Smoking products

British American Tobacco (LSE: BATS) makes cigarettes, tobacco and next-generation products for smokers. The share price has been weak for a while and out of favour with investors but the dividends keep on coming.

Over the past five years, the dividend has risen around 37% and at today’s share price close to 2,872p the dividend yield runs near 7.5% for 2020. Meanwhile, the forward-looking P/E ratio for that year sits at 8.5 suggesting that the stock trades at a level representing decent value right now.

In April, the company said the business is in good shape despite investors’ concerns about possible regulation in the US and “competitor dynamics” in new product categories. The firm reckons the causes of those concerns “in fact present significant opportunities for future growth.” I think BATS looks like an attractive contrarian ‘buy’ right now.

The post Forget a Cash ISA! I’d buy these 3 FTSE 100 dividend growth stocks right now appeared first on The Motley Fool UK.

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Kevin Godbold has no position in any share mentioned. The Motley Fool UK 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.

With that in mind, here’s a look at one Brexit-proof FTSE 100 dividend stock I’m interested in buying for my ISA this year and watching closely right now.

Global healthcare

Smith & Nephew (LSE: SN) is a leading healthcare company that specialises in joint replacement systems for knees, hips, and shoulders. It operates in 100 countries and generates a large proportion of its revenues from the US and emerging markets, meaning that it should be well insulated from any Brexit-related economic downturn.

There are a number of reasons I like the look of Smith & Nephew and I am keen to add it to my portfolio. For starters, the stock looks set to benefit from an extremely powerful trend – the world’s ageing population. According to data from United Nations, the number of people aged 60 or over across the world is set to double by 2050. This should provide significant tailwinds for the group in the years ahead as demand for joint replacements rises.

The group’s emerging markets exposure (17% of revenue) is another plus. When a country experiences a rise in wealth, one of the first things you often see is a corresponding rise in demand for healthcare. With wealth set to rise significantly in countries such as China and India over the coming decades, Smith & Nephew should benefit.

Technological advances

The FTSE 100 stock also looks quite exciting from a technological perspective, in my opinion. Just a few weeks ago, the group announced that it was “making a long-term commitment to bring together advanced technologies in robotics, digital surgery, and machine learning as well as augmented reality to empower surgeons and improve clinical outcomes.”

As I mentioned recently, robotics has come a long way in recent years and what robots can do these days is quite amazing. The fact that Smith and Nephew is currently working on a handheld robotic surgical system that is designed to “improve the surgeon experience” is certainly a positive development.

Dividend legend

Finally, Smith & Nephew is a legendary dividend stock, as the group has paid a dividend every year since 1937. Dividend coverage is high too, meaning the chances of a cut in the near term are low. Currently, the yield is around 2%.

The shares have had a good run over the last year and currently trade on a forward-looking P/E of 19.7. While I don’t think that’s outrageously expensive for a high-quality dividend stock with a lot of potential, I would prefer to pay a slightly lower price. So for now, patience is required. I’ll be looking to buy this stock during the next market pullback.

The post A ‘Brexit-proof’ FTSE 100 dividend stock I want to buy for my ISA this year appeared first on The Motley Fool UK.

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Edward Sheldon has no position in any shares mentioned. The Motley Fool UK 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.

Underlying replacement cost profit ballooned to $12.7bn in 2018, from $6.1bn a year earlier, thanks to the strong crude price. Operating cash flow improved to $26.1bn from $24.1bn a year earlier, too. These numbers prompted BP to raise the full-year dividend to 40.5 US cents per share, from 40 cents earlier, and drew a line under the payout freezes of recent years.

Sure, the energy producer has the wind in its sails right now. I’m concerned, though, that the 11% earnings rise forecast for 2019 could be chopped down as global economic growth cools and the outcome of US-Chinese trade talks remains very much up in the air. That means some downward pressure on oil prices are a strong possibility.

I’m not suggesting that BP won’t have the strength to meet this year’s forecasts. Far from it. Indeed, the extra $10bn worth of divestments it’s earmarked through the next two years should give it the base to keep paying abundant rewards. The rate at which oil production is ramping up in major regions, though, and particularly so in North America, suggests that the impressive profits more recently could be consigned to history. And with it, BP’s ability to keep forking out giant dividends.

An emerging market great

If you’re looking for a FTSE 100 stock in much better shape to thrive in the years ahead, Smith & Nephew (LSE: SN) fits the bill. And its latest trading details have bolstered my bullishness.

The medical company, a specialist in the manufacture of artificial limbs and joints, saw its sales performance gather momentum as 2018 rolled on. What was particularly impressive was its performance in emerging markets.

Underlying sales in these growth regions rose 8% last year, underpinned by strength in China and Latin America. In fact, revenues from Chinese customers surged by double-digit percentages once again. I’ve long lauded these fast-growing regions as a key reason to snap up Smith & Nephew, where rising healthcare investment is lighting a fire under demand for the company’s amazing technologies. So I’m pleased to see the Footsie firm continue to make waves here.

A sprinting share price

It wasn’t a surprise to see Smith & Nephew’s share price spring to record highs, a shade off £15.50 in the wake of the release. Its share price has vaulted 20% over the past three months and with the sales troubles of a year ago seemingly behind it, I’m expecting further heady gains through the year.

City analysts have been steadily upgrading their earnings estimates since the tail end of 2018, and an 8% rise is currently predicted. A forward P/E ratio of 26.9 times isn’t exactly cheap, sure. Though given its bright profits picture over a long time horizon — not to mention the possibility of more forecast upgrades in the weeks and months ahead — I wouldn’t consider Smith & Nephew to be excessively priced right now.

Indeed, despite this lofty valuation I’m much more attracted to the business rather than BP and its low prospective earnings multiple of 14.8 times. Clearly, the medium-to-long-term outlook here is hamstrung with uncertainty because of the twin threat of swamping supply and the rising appeal of greener energy sources. And for this reason I’m happy to steer well clear.

The post Why I’d ignore the BP share price, and its big dividends, and buy this FTSE 100 hero instead appeared first on The Motley Fool UK.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK 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.

In my view, one of the easiest ways to do this is to invest in high-quality, dividend-paying companies that generate a significant proportion of their earnings internationally. These kinds of companies shouldn’t be affected too badly if the UK economy tanks, and if the pound was to fall further, it would actually boost their earnings. With that in mind, here’s a look at two FTSE 100 companies that I believe could provide Brexit protection.

Healthcare specialist

Smith & Nephew (LSE: SN) is a leading healthcare company that specialises in joint replacement systems for knees, hips, and shoulders. It has operations in 100 countries and with around half its revenue coming from the US, and a significant proportion coming from the emerging markets, a Brexit-related economic downturn here in the UK is unlikely to be a significant setback for the group, in my opinion.

Yet Brexit-protection isn’t the only the reason I like the look of Smith & Nephew. I also like the fact that the company is well placed to benefit from the world’s ageing population. You see, the number of people aged 60 or over around the world is forecast to increase significantly in the coming decades, and as such, I’m expecting demand for its joint replacement systems to remain robust. In the US alone, around 27m people suffer from wear-and-tear arthritis, so the long-term growth story here looks compelling, in my opinion.

Furthermore, the stock also looks attractive from a dividend-investing perspective, as the company has paid a dividend every year since 1937, which is an excellent achievement. The yield is not super high at 2.1%, however dividend coverage is excellent, which indicates the payout is secure.

Trading on a P/E ratio of 18.8, I think the stock is an excellent Brexit-protection play.

Global energy giant

Another FTSE 100 dividend stock that I believe could provide an element of protection from Brexit is Royal Dutch Shell (LSE: RDSB). As a global energy group that has operations in 70 countries, the state of the UK economy is largely irrelevant to the group’s fortunes.

One of the main attractions of Shell shares in my view is its dividend, which is both highly reliable and generous. It hasn’t cut its dividend since World War II and for this reason, the stock is a preferred dividend play for both institutional investors and private investors alike. Furthermore, the yield, at around 6.1% currently, is fantastic. No matter what happens with the UK economy, investors should still be able to pick up a nice payout.

The shares currently trade on a P/E of 10.1, which I believe is an attractive valuation for a company with its track record. I think the stock offers strong Brexit-protection appeal right now.

The post Brexit: Two FTSE 100 dividend stocks I’d buy for protection appeared first on The Motley Fool UK.

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Edward Sheldon owns shares in Royal Dutch Shell. The Motley Fool UK 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.

Its share price has retreated from the record peaks above £15 struck in the run-up to Christmas but I’m tipping it to pound to fresh peaks sooner rather than later, possibly as soon as when full-year results come out on February 7. Now is a great time to plough into the medical implants manufacturer, in my opinion.

M&A rolls on and on

With global healthcare investment rising Smith & Nephew, with its robust position in the US and rising might in emerging markets, is in great shape to produce strong and sustained profits in the years ahead. It offers a broad range of market-leading technologies across fields like advanced wound care, joint reconstruction and sports medicine, and fresh M&A action in December boosted its suite of cutting-edge technologies still further.

The procurement of California-based Ceterix Orthopaedics, for a fee that could eventually rise to $105m, gives the firm’s sports medicine operations access to the lauded NovoStitch Pro product which enhances its existing position in the field of meniscal surgery. The Footsie firm estimates that 15% to 20% of these knee-related operations are solved via repair rather than removal, but it believes that this number can be doubled in the medium term with help of its newly-acquired technologies.

This is a particularly shrewd move. The company estimates that in the US alone, the number of so-called orthopaedic reconstructive procedures carried out in ambulatory surgery centres (ASCs) between 2017 and 2022 are set to grow at a compound annual growth rate of 24%. Incidentally, Smith & Nephew also expects ASC procedure volumes involving its sports medicine, ear nose and throat, and trauma and extremities products will rise at a growth rate of 5% to 7% over the same period.

Up, up and away!

City analysts believe that the only way is up from here, and expect the London company to recover from the mixed trading performances and restructuring-related profits hits of earlier in 2018. Smith & Nephew is predicted to rebound from the 1% earnings dip forecast for last year and record a 6% profits rise in 2019 and a 7% on-the-year improvement in 2020.

As a consequence, the medical mammoth is predicted to keep its long-running progressive dividend policy ticking along too. An anticipated payout of 36 US cents per share for 2018 is predicted to rise to 37 cents this year and again to 41 cents next year, forward figures that yield a handy-if-unspectacular 2% and 2.2% respectively.

The forward P/E ratio of 18.3 times doesn’t make it cheap, but it’s great value in my opinion considering the company’s exceptional long-term profits outlook. I reckon investors should consider snapping it up today before the rest of the market wises up.

The post Have £3k to spend? I’d buy this FTSE 100 dividend growth stock before the market comes to its senses appeared first on The Motley Fool UK.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK 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.