The FTSE 100 is in a powerful bull market right now. Currently, nearly 70% of the stocks in the index are above their 50-day moving averages (meaning that they’re trending up).
Looking for shares to buy in this market? Here are two Footsie names to consider now.
A bank stock with a big dividend
First up, we have banking powerhouse HSBC (LSE: HSBA). It has had a good run recently (it’s up about 45% over the last year) but it still looks quite cheap today on a price-to-earnings (P/E) ratio of 8.7.
I’m bullish on this bank stock for a few reasons. One is that I like the company’s strategy. Today, HSBC’s management is focused on creating a simple, more agile, focused bank built on its core strengths. This involves targeting high-growth areas such as Asia and wealth management. It also involves cutting costs. Recently, management said that it’s committed to an annualised reduction of $1.5bn in its cost base by the end of 2026.
Another is that the company is returning plenty of capital to investors. Earlier this month, HSBC advised that it’s initiating a buyback of up to $2bn. It also declared total dividends of 87 cents per share for 2024. That translates to a yield of 7.7% at today’s share price (note that analysts expect a lower payout of about 66 cents per share for 2025).
Of course, as a global bank, HSBC does face plenty of risks. These include economic weakness in China, falling interest rates (higher rates are generally better for banks), and regulatory fines.
Given the relatively low valuation and attractive dividend payments, however, I like the risk/reward proposition.
Growth and income at a reasonable price
Another Footsie stock that I believe is worth a look today is Coke bottler Coca-Cola HBC (LSE: CCH). It also has strong share price momentum at present but doesn’t look particularly expensive (the P/E ratio is about 15.7).
One reason I’m bullish on this stock right now is that the company is growing at a really healthy rate. Earlier this month, it advised that for 2025 it expects organic revenue growth of 6%-8% along with earnings per share growth of 7%-11%.
It’s worth noting that since the company provided these forecasts, a number of brokers have raised their price targets for the stock. These include Bernstein and JP Morgan, who have gone to 3,625p and 3,650p respectively.
I also like the company’s dividend growth track record. The yield here isn’t super high (about 3% currently) but the payout has been increased every year since 2014.
Of course, changing consumer tastes and preferences are a risk here. While Coke has been around for decades, there are no guarantees that it will continue to be popular in the years ahead.
The good news, however, is that Coca-Cola HBC has a whole portfolio of beverages (including sports drinks, coffee, energy drinks, and spirits). This diversified portfolio should reduce brand specific risk for investors.
This post was originally published on Motley Fool
