What a volatile six months it has been in broader markets. Following the bull market of January and February, the coronavirus that initially affected China became a global pandemic. As countries went into lockdowns, panic hit the markets. Yet after the market lows in March, many FTSE 100 shares had stellar run-ups in price.
Not every FTSE 100 stock has recovered fully, but there are several shares that are up considerably in 2020. It has now become a stock-pickers market. Those investors who concentrate on the new post-Covid-19 economy are likely to continue doing well in the second half of the year. Therefore, I’d like to discuss two FTSE 100 shares that are up in 2020. I believe they still deserve to be on your radar.
Highest market capitalisation in the FTSE 100
My first choice for today is pharma giant AstraZeneca (LSE: AZN), whose shares are up 13% year-to-date (YTD). The group is now the UK’s biggest company by market capitalisation. It’s worth over £111bn. Before the market crash, oil major Royal Dutch Shell was heading the list. But the downturn has pushed the share price down by over 43% so far in the year. And the company is now number eight on the list. What a change of fortunes.
AZN shares have been buoyed in part by pharmaceutical companies’ relative safety amid the health and economic effects of the pandemic. Investors are also ready to pay a premium for its portfolio of drugs. That may be why the stock price has almost doubled in the past five years. In July 2016, it was around 4,280p. Now it is hovering at 8,460p.
The group concentrates on several major disease areas, including cancer, cardiovascular, diabetes, gastrointestinal, infection, inflammation and respiratory. A wide range of pharma companies are currently racing to develop a vaccine against Covid-19 and AZN is one of the forerunners. In mid-June the pharma giant announced that (assuming a vaccine works) it would “supply Europe with up to 400 million doses of Oxford University’s vaccine at no profit.”
As a result, the share price has been reacting extremely well. If AZN shares had been your only portfolio holding, you might not have thought that there has been a market crash in 2020. Shareholders also enjoy a current dividend yield of 2.65%.
Consumer rules
The second stock I want to highlight is consumer goods giant Reckitt Benckiser (LSE: RB). This year, RB shares are up over 21%.
I expect the volatility in the markets to continue in the coming weeks. Another market crash could also happen. Therefore I’d make defensive stocks part of any long-term portfolio. Analysts regard consumer staples companies as defensive. People continue to buy household items, cleaning products, and other essentials such as personal hygiene products, even when their salaries are shrinking. And the potential second wave of the viral outbreak means everyone must pay more attention to basic hygiene than before.
On 30 April, the group also released Q1 results and reported record quarterly sales growth. The robust results were led by increased demand for many of its hygiene products, such as Dettol and Lysol, and health products like Mucinex, Nurofen, and VMS.
Reckitt Benckiser’s current dividend yield stands at 2.6%. The shares are expected to go ex-dividend in August. The FTSE 100 group feels to me like a must-have if you want a consumer-defensive company in your portfolio.
