If you have £3,000 to invest today, there are plenty of FTSE 100 stocks to choose from in this market.
However, it’s highly unlikely that all of these businesses will emerge from the coronavirus crisis unscathed.
With that in mind, here are three FTSE 100 companies that appear to have the resources to survive. They could even emerge stronger on the other side.
Should you invest £1,000 in HSBC right now?
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FTSE 100 dividend champion
A few weeks ago, I highlighted FTSE 100 dividend champion Rio Tinto (LSE: RIO) as an income stock to buy in the market turmoil.
It looks as if the company still meets this goal. Indeed, as the company’s FTSE 100 peers have slashed their dividends, Rio is standing by its distribution policy.
The company’s Chairman told its shareholders last week that Rio will go ahead with its $3.7bn dividend payment this month. That means investors are in line for a $2.31 per share payout.
Rio has not been unscathed by the virus. It has had to shut production at its mineral sands operation in South Africa and moderate activity at mines in Mongolia and Canada.
Nevertheless, the price of iron ore, which accounts for most of Rio’s output, has remained steady at around $83 per tonne. Production costs are below $20 per tonne.
This suggests that the company’s iron ore operations are still producing large profits, despite disruption elsewhere.
As such, it could be worth adding Rio to your portfolio after recent declines.
Family-owned
Another FTSE 100 company that looks attractive after recent declines is Schroders (LSE: SDR).
Schroders is one of the largest wealth managers in the UK. Unfortunately, it’s unlikely to escape the coronavirus crisis unscathed.
However, from a long term perspective, the stock looks highly attractive.
The firm’s founding family remain one of its largest shareholders. That suggests management has shareholders’ best interests in mind. Indeed, the firm actually emerged from the financial crisis in a stronger position than many of its peers for that reason.
Schroders will likely see a decline in earnings and assets under management in 2020 due to the recent stock market declines. Nonetheless, as the markets recover over the next few years, the company’s size will help it stand out in a crowded field.
With that being the case, now could be a good time for long term investors to snap up a share in this storied enterprise.
Defensive position
Hikma Pharmaceuticals (LSE: HIK) is one of the FTSE 100’s most defensive stocks. It also looks as if the company is one of the few businesses in the FTSE 100 that could outperform this year.
At the end of February, Hikma informed the market that demand for its newly launched drugs in the US is exceeding expectations. This will help the company beat City growth expectations for the year, according to management.
Therefore, if you’re looking for a relatively safe investment in this market, it could be worth taking a closer look at Hikma. The stock is currently dealing at a price-to-earnings (P/E) ratio of 16.8.
I wouldn’t be surprised if this ratio drops as analysts upgrade their growth forecasts for the year following the company’s recent trading statement.
It also offers a dividend yield of 1.8%. The payout is covered 3.2 times by earnings per share, which suggests that it’s incredibly safe.
