The investment prospects of SSE PLC (LON:SSE) (SSE.L), Tesco PLC (LON:TSCO) (TSCO.L), National Grid plc (LON:NG) (NG.L) and easyJet plc (LON:EZJ) (EZJ.L) are the focus of this article. Could they outperform the FTSE 100?
SSE’s financial performance has been negatively impacted by poor weather in recent months. This has hurt investor sentiment in the stock and shown that its defensive qualities may not be as strong as had been anticipated by some investors.
With SSE also making significant changes to its business model and facing political as well as regulatory risk, its share price could be volatile in my view. But in the long term, a dividend yield of over 7% may suggest that it has investment appeal in my opinion.
Tesco’s financial prospects could be negatively impacted by weak consumer confidence. This may increase demand for budget retail offerings such as Aldi and Lidl as shoppers become increasingly price conscious.
However, with Tesco aiming to capitalise on the no-frills segment through its ‘Jack’s’ offering, I think it could benefit from changing consumer tastes. And with margin growth set to be delivered and it having a PEG ratio of 0.8, I believe the stock could have long-term investment appeal.
National Grid’s operational performance has been relatively sound in my opinion. The stock could become increasingly popular if the FTSE 100 remains volatile, since investors may seek perceived lower-risk shares.
With National Grid having a dividend yield of over 5%, I think that the company could offer long-term income potential. While regulatory and political risks remain, I wouldn’t be surprised if it outperforms a volatile wider index.
easyJet’s financial outlook could be boosted by a falling oil price. However, a weak consumer environment and uncertainty about the wider airline industry ahead of Brexit could hold back its investment performance in my opinion.
The company, though, seems to have a sound strategy according to my research. It has been able to increase passenger numbers while maintaining a disciplined approach to costs. With a PEG ratio of around 0.8, I feel that the easyJet share price could deliver FTSE 100-beating performance in the long run.