The investment prospects of Diageo plc (LON:DGE) (DGE.L), AstraZeneca plc (LON:AZN) (AZN.L), Glencore PLC (LON:GLEN) (GLEN.L) and National Grid plc (LON:NG) (NG.L) are the focus of this article. Could they deliver better returns than the FTSE 100 in the long run?
Diageo’s global exposure could help it to overcome possible market weakness caused by Brexit in my opinion. It may be seen as a relatively defensive share due to its track record of resilient growth during a variety of economic scenarios.
I also think that the company’s strategy may boost its financial prospects. It is focusing on core brands as it seeks to become more efficient. This may lead to a further premium being placed on the Diageo share price in my view.
Glencore’s share price could continue to be volatile in the near term in my opinion. Uncertainty surrounding the resources sector may remain high as a result of fears about the future prospects for the global economy.
Glencore, though, has a single-digit P/E ratio, which could mean that it has a margin of safety. Since it has significant exposure to the raw materials required for use in electric vehicles, I feel it could enjoy a tailwind as their demand looks set to increase over future years.
National Grid’s business model is relatively defensive in my view. This could make it increasingly popular with investors ahead of Brexit, with a more risk-averse stance being adopted in recent months.
Although the stock faces regulatory and political risk over the medium term, I feel that its 5%+ dividend yield could mean that it offers good value for money. As a result, I believe National Grid could outperform the FTSE 100.
AstraZeneca appears to be making progress with its turnaround in my opinion. The company is focusing on improving the strength of its pipeline, and is expected to deliver its first meaningful EPS growth for a number of years in 2019.
With a PEG ratio of around 1.6 and a dividend yield of 3.8%, I feel that the AstraZeneca share price could be undervalued at the moment. With what I consider to be a mix of defensive characteristics and growth potential, I believe that the stock could beat the Footsie in the long run.