I’m focusing on the investment potential of global shares AstraZeneca plc (LON:AZN) (AZN.L), Prudential plc (LON:PRU) (PRU.L), HSBC Holdings plc (LON:HSBA) (HSBA.L), Royal Dutch Shell Plc (LON:RDSB) (RDSB.L) and BHP Billiton plc (LON:BLT) (BLT.L).
In my opinion, AstraZeneca could provide a tonic for Brexit uncertainty. It operates in a wide range of regions and has relatively low positive correlation to the macroeconomic outlook. The company has invested heavily in its acquisition programme in recent years and I feel this could provide it with high growth in the long run. With a 4%+ dividend yield, AstraZeneca is one of my favourite income stocks.
However, its dividend yield is lower than that of Shell. The diversified oil and gas company has a yield in excess of 6%, and I think it could grow. The acquisition of BG has provided the company with the potential to increase FCF over the next few years. With a relatively low debt position, this could be used to fund future growth or a higher dividend in my opinion. Therefore, I’m optimistic about Shell’s future income investing potential.
HSBC may also be able to increase dividends in my view. The bank has exposure to fast-growing economies in Asia, where demand for credit and a range of financial services is on the up. The bank is also seeking to become more efficient and this could help to lower its cost to income ratio. With a P/E of 13.5, I think the HSBC share price offers good value for money.
Prudential also has exposure to fast-growing markets in Asia. I also like the company’s diversity and feel this helps to lower its overall risk profile. It may also help to boost customer loyalty towards the company, since it can provide a comprehensive wealth management and banking service to clients. With Prudential having a P/E of 14, I think it is relatively cheap given its growth prospects.
With BHP Billiton having a diverse asset base, I think it offers reduced risk versus some of its more concentrated peers. It also has little or no correlation to the UK economy, so this could help it to perform well relative to UK-focused companies should the Brexit process create further difficulties for the UK economy. With a dividend yield of 4.5%, BHP Billiton offers sound income prospects in my opinion and could perform well if inflation continues to rise.