I’m feeling optimistic about the prospects for the FTSE 100, which is why I’m focusing on the investment outlooks of GlaxoSmithKline plc (LON:GSK) (GSK.L), Tesco PLC (LON:TSCO) (TSCO.L), Vodafone Group plc (LON:VOD) (VOD.L) and Just Eat PLC (LON:JE) (JE.L).
In my view, GlaxoSmithKline has a bright future. The company is relatively diverse, with its vaccine, pharma and consumer goods segments combining to create a company with a relatively resilient growth outlook. This could reduce the company’s overall risk level and mean that it is worthy of a premium valuation.
With a near-6% dividend yield, I feel GlaxoSmithKline has income investing appeal. A P/E of less than 12 means the stock looks cheap to me.
Tesco could also offer good value for money. It has a PEG of around 0.6, which is appealing to me even in a retail sector which seems generally undervalued.
Sure, Tesco faces a difficult future. Competition within the supermarket sector is intense and with consumer confidence being low there could be additional pressure on the company. However, the acquisition of Booker could boost its profitability over the medium term and improve its current valuation.
Vodafone is my top pick in the telecoms sector. I feel it has a good strategy which has performed well in recent years. Investment in its network and customer proposition is set to aid the company in delivering double-digit EPS growth next year.
With Vodafone also having a diverse business model as well as a 6% dividend yield, I believe it could have a good mix of growth and defensive prospects. With inflation marching higher, I’m becoming more optimistic about its income appeal.
Just Eat’s promotion to the FTSE 100 recently grabbed the headlines. While it is proof of the success of the business, I think there could be more to come. The acquisition of Hungryhouse has now been cleared and this may provide a positive catalyst on the company’s stock price.
With a diverse business model and the financial strength to make further investments in technology and the customer experience, I’m feeling upbeat about the prospects for Just Eat. I think the sector in which it operates could enjoy further growth even during more challenging economic times.