While I’m generally optimistic about the long-term prospects for the FTSE 100, I’m considering whether BP plc (LON:BP) (BP.L), Next plc (LON:NXT) (NXT.L), BAE Systems plc (LON:BA) (BA.L) and WM Morrison Supermarkets PLC (LON:MRW) (MRW.L) can outperform the index.
BP may face an uncertain near-term outlook in my view. I wouldn’t be surprised if the oil price falls further after its recent decline, with investor sentiment towards the sector being weak.
BP, though, seems to have a margin of safety included in its share price to my mind. Its near-6% dividend yield and the investment being made in its operations, as well as acquisitions, could catalyse its long-term financial performance in my opinion.
Next’s near-term future may also be relatively uncertain. Consumer confidence is weak and could become increasingly downbeat as Brexit moves closer. People seem to be fearful of a no-deal Brexit, and this fear could be enough on its own to cause challenges for the economy over future months.
Next’s strategy appears to be sound in my opinion. Its focus on diversifying its customer experience to include leisure activities while also improving its omnichannel capabilities could allow it to outperform many of its industry peers.
BAE’s shares could remain under pressure in the near term. Concerns about one of its largest customers, Saudi Arabia, and the political risk it faces may cause investors to demand a larger margin of safety.
In the long run, though, I feel that BAE could benefit from continued demand growth for a variety of products in the defence sector. Military spending across NATO is due to increase, and this could provide the business with a long-term tailwind.
Morrisons appears to have put in place a sound growth strategy in my opinion. The company has focused on boosting its wholesale sales, and this has provided it with greater access to the convenience and online opportunities which are available.
Investment in its staff and in a customer loyalty scheme could improve customer satisfaction levels. With EPS growth ahead for the business, I feel that the Morrisons share price could outperform a number of its industry rivals over future years.