While share prices have been volatile of late, I’m optimistic about the future performance of the stock market and that’s why I’m focusing on the prospects of National Grid plc (LON:NG) (NG.L), Tullow Oil plc (LON:TLW) (TLW.L), Royal Mail PLC (LON:RMG) (RMG.L) and British American Tobacco plc (LON:BATS) (BATS.L).
National Grid could enjoy improving share price performance if markets remain volatile. The stock has historically been viewed as a relatively defensive option for investors who are concerned about the future prospects for the wider index.
In addition, National Grid also has a dividend yield of around 5%. This is set to stay ahead of inflation. Further, the company has the potential to raise dividends at the same pace as inflation. This could boost its total returns and investment appeal in my view.
Tullow Oil appears to have put in place a solid growth strategy. The company is seeking to increase production in order to generate higher cash flow. This could be used to reduce debt levels so as to make the company more sustainable for the long term.
Since I’m optimistic about the prospects for the oil price, I believe that Tullow Oil could enjoy a relatively prosperous future.
Royal Mail may also have a stronger future than the market is currently anticipating. Although its share price has risen significantly in recent weeks, it still has a dividend yield of around 4.5%. This suggests to me that there could be a value opportunity on offer.
With Royal Mail having exposure to international markets through its GLS division, it seems to be well-placed to generate improving investment performance in the long run.
British American Tobacco continues to be one of my top picks in the Footsie. The company has experienced a difficult number of months, with uncertainty being high regarding its long term potential.
However, with the company investing heavily in the reduced risk products segment, it seems to be in a good position to develop further growth opportunities. Therefore, I remain bullish on British American Tobacco’s investment outlook.