With FTSE 100 share prices falling, now is a great time to pick up some bargains. In light of the coronavirus pandemic, the index has slumped by 18% year-to-date.
However, just because something is cheap, it doesn’t mean it’s a bargain. Often there’s a very good reason a stock is cheap, and it should be avoided.
These turbulent markets often favour long-term investors. These investors have the time to ride out short-term fluctuations and to take advantage of the FTSE 100’s likely recovery.
Should you invest £1,000 in Legal & General right now?
When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Legal & General made the list?
I’ve identified two FTSE 100 stocks that I think might be good shares to buy and hold.
Reckitt Benckiser
In the current market, I don’t think there’s anything better than a company selling small-value consumable items. I see these sorts of companies as relative safe havens, particular given the volatility in the market. I can’t imagine the majority of customers quibbling about spending a few pence extra on their favourite branded items such as those offered by Reckitt Benckiser (LSE: RB).
Reckitt Benckiser’s share price is a testament to its defensive capabilities. Unlike the FTSE 100, its share price has risen by roughly 25% year-to-date. This gives the stock a price-to-earnings ratio of 22. Far from cheap, then.
But with an extensive list of household brands in its portfolio, like Vanish, Durex, and Gaviscon, I think Reckitt Benckiser has an in-built economic moat against rivals. I believe this is worth paying a bit extra for.
With various hygiene products in its portfolio, like Harpic and Dettol, the company will probably see higher revenue for some time to come.
In any case, I think Reckitt Benckiser has proven that it’s a defensive gem in the FTSE 100 and could be a good share to buy and hold.
A cheap FTSE 100 share?
Unlike Reckitt Benckiser, the Legal & General (LSE: LGEN) share price looks cheap to me. Year-to-date, the FTSE 100 financial giant’s share price has slumped 27%. This reduction in price means the price-to-earnings ratio is just 8.
Like most of the FTSE 100, Legal & General has been impacted by Covid-19. However, as fellow-Fool Rupert Hargreaves notes, due to an impressive jump in new business, the company has suffered less than others.
Unlike other companies in the UK index, Legal & General has committed to its dividend. With other FTSE 100 businesses slashing, suspending, or cancelling dividends, this should get potential investors interested. However, what’s seriously impressive is Legal & General’s prospective dividend yield, which is currently 7.5%. I think this indicates that, despite the coronavirus, the business is financially robust.
With Legal & General’s seemingly cheap share price and generous dividend, I think it could be one of the best FTSE 100 stocks to buy and hold right now.
