Every stock market crash offers bargain shares. I’d grab these future gains now

After the worst quarter since 1987, buying these two FTSE 100 shares could turn this stock market crash into your future fortune!

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

After a brutal start to 2020, with the FTSE 100 down a quarter (25%) so far, investors could be forgiven for panicking. But this is just the latest stock market crash in a long line of meltdowns. I vividly remember the panics of 1987, 2003 and 2009. Yet shares recovered and rose after each of these apparently ‘apocalyptic’ events.

Investing in company shares is a long-term strategy over 10+ years. So buying great businesses now should yield bumper profits by 2030 – even if this roller-coaster ride continues for months.

Every stock market crash reveals buying opportunities

Big, bold bets during market crashes have produced outsized returns for patient, long-term investors. To calm your nerves, try buying into only the biggest companies. These two icons of industry will definitely survive the coronavirus crisis and should thrive after the ‘pandemic panic’ is over:

  1. Royal Dutch Shell goes through Hell

As a youngster in the Seventies, I recall the advertising slogan for Royal Dutch Shell: “You can be sure of Shell”. Alas, with the pandemic allied to a spectacular oil-price crash, Shell shareholders are seriously shell-shocked.

Shell’s shares have plunged by three-sevenths (43%) over the past 12 months, not helped by the stock market crash. This has lopped £10 off their price, so they limp along at a mere £13.83. Given the savage oil-price slump, Shell’s near-term earnings are set to be shattered, savaging its shares.

Still, Shell has a proud record of not cutting its shareholder dividend at any time since World War 2, even during the Seventies oil crisis. For the past six years, Shell’s yearly cash dividend has been stuck at $1.88 (£1.51). Today, Shell shares have a dividend yield of 10.9%. Remarkably, reinvesting these dividends would double your money every seven years, even if the Shell share price were to remain at its current price. Wow.

  1. Imperial Brands’ dividends won’t go up in smoke

Multinational tobacco company Imperial Brands makes the JPS, Gauloises and Winston brands of cigarettes, among many others.

Clearly, shares in this £14.6 billion giant are not suitable for ethical investors, yet almost nothing stops its addicted consumers from smoking fags. In a recent update following the stock market crash, Imperial confirmed that “Covid-19 has [had] no material impact on Group performance to date and current trading remains in-line with expectations.”

Imperial is a cash-generating juggernaut, yet its shares have also fallen by three-sevenths (42%) over the past 12 months, just like Shell’s. Its past four quarterly dividends total 206.57p, including 72.01p paid yesterday. Its current dividend yield is a whopping 13.4%. Even were this halved to 6.7%, it would still be attractive to income investors.

The strongest survive stock market crashes

It’s highly unlikely that the current market crash is over, so expect plenty more volatility in the share prices of Royal Dutch Shell, Imperial Brands and other firms. But if you can keep your head and buy cheap shares now, you can enjoy these juicy dividends rolling in for decades to come!

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Cliff D'Arcy does not own shares in Royal Dutch Shell or Imperial Brands. The Motley Fool UK has recommended 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.

More on Investing Articles

happy senior couple using a laptop in their living room to look at their financial budgets
Investing Articles

How’s the dividend forecast looking for Legal & General shares in 2025 and beyond?

As a shareholder, I like to keep track of the potential dividend returns I could make from my Legal &…

Read more »

artificial intelligence investing algorithms
Investing Articles

Could buying this stock with a $7bn market cap be like investing in Nvidia in 2010?

Where might the next Nvidia-type stock be lurking in today's market? Our writer takes a look at one candidate with…

Read more »

Investing Articles

Is GSK a bargain now the share price is near 1,333p?

Biopharma company GSK looks like a decent stock to consider for the long term, so is today's lower share price…

Read more »

Snowing on Jubilee Gardens in London at dusk
Investing Articles

Could December be a great month to buy UK shares?

Christopher Ruane sees some possible reasons to look for shares to buy in December -- but he'll be using the…

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

Sticking to FTSE shares, I’d still aim for a £1,000 monthly passive income like this!

By investing in blue-chip FTSE shares with proven business models, our writer hopes he can build sizeable passive income streams…

Read more »

Growth Shares

BT shares? I think there are much better UK stocks for the long term

Over the long term, many UK stocks have performed much better than BT. Here’s a look at two companies that…

Read more »

British Pennies on a Pound Note
Investing Articles

After a 540% rise, could this penny share keep going?

This penny share has seen mixed fortunes in recent years. Our writer looks ahead to some potentially exciting developments in…

Read more »

Silhouette of a bull standing on top of a landscape with the sun setting behind it
Investing Articles

Is the S&P 500 going to 10,000 by 2030? This expert thinks so

One stock market strategist sees animal spirits taking hold and driving the S&P 500 index even higher by the end…

Read more »