As the government continues to push ahead with the reopening of the UK economy, I’ve been looking for FTSE 100 reopening stocks to add to my portfolio.
Here are two companies I have been eyeing up recently, intending to buy.
FTSE 100 reopening stocks
The first company I’d buy JD Sports (LSE: JD). Best known for selling big-brand trainers, JD Sports has been impacted by the pandemic like most other retailers.
The company’s bricks-and-mortar stores had to be closed earlier this year in the third national lockdown. However, it has been able to offset a decline in bricks-and-mortar sales with its online operation.
For the 52 weeks ended 30 January, the group’s overall profit before tax declined slightly from £439m in fiscal 2020 to £421m for fiscal 2021.
As the economy reopens, I think the company is well placed to stage a strong recovery. Not only has JD managed to weather the coronavirus crisis incredibly well, but it has also acquired a handful of businesses recently.
The acquisitions of Shoe Palace and DTLR in the United States and Sizeer in Central and Eastern Europe only add to the company’s growth potential in my eyes.
I think these deals will help turbocharge the company’s recovery as we exit lockdown. That said, another wave of coronavirus and lockdown could set the recovery back months. In addition, higher costs could also hit profit margins at JD. If the above acquisitions don’t live up to expectations, they could become costly mistakes for the group.
Despite these risks and challenges, I would buy the FTSE 100 company for my basket of blue-chip reopening stocks today.
Commercial Property
The other company I would buy for my FTSE 100 recovery stocks portfolio is real estate investment trust (REIT) British Land (LSE: BLND). Over the past 12 months, this enterprise has faced one of the most hostile operating environments in its history. Rent collection figures have plunged as tenants have struggled to meet their obligations. The REIT has also had to write down the value of its property portfolio substantially.
The good news is, British Land’s outlook is now improving. As workers return to offices and shoppers to high streets, rent collection figures are improving. The organisation collected 76% of its rent due for March 2021 and 82% for 2021 as a whole. In March of last year, the group gathered just 68% of rents for the March quarter.
As the economy continues to reopen, I expect British Land’s rent collection figures to improve further. This could have a positive impact on the FTSE 100 company’s share price and dividend potential.
Unfortunately, it might take longer for property values to recover. This could prove to be a drag on the company’s stock price for some time. In addition, another coronavirus wave may also heap more pain on the group.
Yet even after taking these risks into account, I would buy the REIT for my portfolio of FTSE 100 reopening stocks today.
