2 of the best performing FTSE 100 stocks so far in 2024 seem like a clear buy to me!
I recently found the best FTSE100 Stocks by share price performance from 2024 to today. A few well-known names stood out.
Two tips that I would like to discuss in more detail today are DS Smith (LSE: SMDS) and Beazley (LSE: BEZ).
For this reason, the next time I have money to invest, I would like to buy shares in both selections.
DS Smith
DS Smith, an international packaging company, has been around for a long time – around 70 years. I have to admit that packaging is not the most exciting business. However, I am more interested in shareholder value and DS Smith meets this criterion very well.
Shares have had a good run of late. Over a 12-month period they are up 64%, from 286p this time last year to the current level of 470p. In 2024 they are up 53%, from 306p to the current level.
DS Smith has a fantastic track record of consistently increasing earnings and profits over many years. While I know past performance is no guarantee of future performance, I can see this trend continuing. Changing shopping habits and the e-commerce boom have created a huge demand for packaging.
From a return perspective, the shares offer a dividend yield of 3.8%, which makes the investment more attractive. However, I realize that dividends are never guaranteed.
Finally, the company continues to adapt to future trends and is attractive to ESG investors by using environmentally friendly packaging alternatives, which could help future-proof earnings.
Two things I will be keeping an eye on are DS Smith’s valuation as well as inflationary pressures. The shares trade at a price-to-earnings ratio of 17, so any dent in earnings could cause the share price to fall. Inflation is a concern as a rise in commodity costs could hurt profitability and earnings.
Beazley
Lloyds of London’s Beazley insurance company specialises in specialty insurance risks and reinsurance. Like DS Smith, the business is not particularly exciting, but it still looks like a solid investment to me.
Shares have also performed well, rising 40% over a 12-month period, from 537p this time last year to current levels of 754p. Year to date, they are up 44% in 2024, from 522p to current levels.
I can understand why the shares have done so well this year, and the excellent interim results released earlier this month have contributed to this rise. The key takeaways for me were that pre-tax profits are up a whopping 99% compared to the same period last year. In addition, insurance premiums and earnings per share have also risen impressively.
From a fundamental perspective, the stock seems to offer excellent value for money with a price-earnings ratio of just over four. In addition, a dividend yield of 1.9% speaks in favor of my investment decision.
Looking at the bear case, insurance companies like Beazley are at the mercy of disasters or calamities that can erode profits when payouts are required. A prime example of such an event is last month’s IT outage that affected millions of people. Although it was unavoidable, it is something I have to keep in mind.
The post “2 of the best-performing FTSE 100 stocks so far in 2024 look like a no-brainer to me!” appeared first on The Motley Fool UK.
Further reading
Sumayya Mansoor does not own any of the stocks mentioned. The Motley Fool UK has recommended DS Smith. The views expressed on companies mentioned in this article are those of the author and may therefore differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool, we believe that considering a diverse range of insights makes us better investors.
Motley Fool UK 2024
