With the cost-of-living crisis biting, many investors (including me) have found it difficult to put large amounts of cash away in savings accounts. But from now on I’m going to be very disciplined. I’ve developed a plan to invest a relatively small amount of cash per month in two FTSE 100 stocks. Let’s take a closer look at where I’ll deploy that £300 every four weeks or so.
Profiting from a high oil price
Oil giant BP (LSE:BP) has seen its share price climb by over 14% in the past month. At the time of writing, the shares are trading at 446p.
For the three months to 30 June, the firm reported that underlying profit increased to $8.5bn from $2.8bn during the same period in 2021. In addition, revenue grew by 85% to $69.5bn.
Given these sparkling results, the business announced that it was paying a quarterly dividend of ¢6.006 per share. It’s also embarking on a brand new $3.5bn share buyback scheme, this is another indication that the company is in a strong financial state.
High oil prices essentially increase the value of BP’s produce. There’s risk, however, that this trend begins to fade as the market becomes better supplied with oil. This could lead to inferior future results for the business.
Regardless, BP’s net debt fell from $32.7bn to $22.8bn, year on year, while operating cash flow stands at $10.9bn.
With a total of £1,800 to spend on the shares in this stock per year, I may be able to purchase 400 shares in that time. With the current dividend payment at $0.22, this could give me $88, or £74. That’s equivalent to 4.1% of my initial investment and may be reinvested.
A global brand
Second, shares in Coca-Cola HBC (LSE:CCH) are up 24% in the last three months. For the six months to 1 July, the drinks manufacturer reported that revenue grew nearly 30% to €4.2bn.
Also, operating profit fell by 21.3% to €275.7m. What explains this decline? It was mostly caused by higher costs and the impact of inflation. Additionally, the company decided to suspend operations in Russia following the invasion of Ukraine.
Russia provided a not insignificant proportion of the firm’s sales, so this ceasing of operations naturally had a detrimental impact on revenue figures.
Despite this, investment bank Deutsche Bank upgraded the company, arguing that it still looked cheap. Indeed, it increased its price target from 2,525p to 2,600p.
My other £1,800 could buy me 86 shares in Coca-Cola HBC in a year. With a dividend payment of €0.71, this may equate to a payment of €61, or £51.
Added to the potential payment from BP, this could mean a total annual dividend payment of £125. I could use this to buy more shares in the future, thus gradually increasing my holdings in each stock.
Overall, these businesses could provide growth in the coming months and years. While both face different challenges, I’m quite confident that they can overcome these in the long term. With that in mind, I’m putting my money where my mouth is and investing £300 per month in these stocks.
The post Nothing saved? I’m putting £300 a month into these 2 FTSE 100 stocks appeared first on The Motley Fool UK.
Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now while it’s still available.
You’ll discover what we think is a top growth stock for the decade ahead… and the performance of this company really is stunning. In 2019, it returned £150 million to shareholders through buybacks and dividends.
We believe its financial position is about as solid as anything we’ve seen.
- Since 2016, annual revenues increased 31%
- In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
- Operating cash flow is up 47%. (Even its operating margins are rising every year!)
Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today! So please don’t wait another moment…
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#FFFFFF”, ‘color’, ‘#FFFFFF’);
- Why I prefer Shell and BP shares over US oil companies
- If I’d invested £1k in BP shares 5 years ago, here’s how much I’d have now!
- A FTSE 100 passive income stock I’ve bought to hold for 30 years!
- Should I buy BP shares today?
- 2 high-dividend FTSE 100 stocks I’d avoid like the plague!
Citigroup is an advertising partner of The Ascent, a Motley Fool company. Andrew Woods has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may 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.