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I'm looking for the best FTSE 100 Index and FTSE 250 Index Stocks I can buy if I have extra money to invest this month. Here are two that have caught my eye.
Properties in Springfield
Now could be a good time to buy shares in building companies, as house-buying activity is picking up speed. The latest data from the Bank of England (BoE) showed that there were 62,000 mortgage approvals in July, beating market expectations and compared with 60,600 in the previous month.
This reflects an improvement in homebuyer confidence and a favourable fall in mortgage costs. With the Bank of England expected to cut its interest rate in the coming months, things could improve further, leading to further gains in share prices as trading improves.
Properties in Springfield (LSE:SPR) is a stock whose earnings are set to soar, according to City brokers. A 41% rise in top-line results is forecast for the 12 months to May 2025.
As a result, the Scottish construction company is trading on a rock-bottom price-earnings (PEG) ratio of 0.5, despite its share price having risen 22% since the start of 2024.
Any reading below 1 implies that a stock is undervalued.
Debt has been a big issue for Springfield recently as the housing market has cooled. It remains something investors need to keep in mind, but the company has done a good job of reducing it so far through land sales and effective cost control.
Net debt was £40m in May, much better than the £55m the FTSE 250 firm had targeted last September.
I particularly like Springfield because of its large exposure to the high-demand affordable housing segment. This has been an issue more recently, as higher costs caused builders to put new contracts on hold. But this growing sector still offers excellent long-term growth opportunities.
Reckitt
If I had the money to spare, I would also consider buying it. Reckitt (LSE:RKT) stock for my portfolio. The FTSE 100 company currently boasts an attractive combination of low earnings multiples and very high dividend yields.
For 2024, the home goods giant is trading at a price-to-earnings (P/E) ratio of 13.7 times, well below its five-year average of around 21 times.
Meanwhile, its dividend yield stands at 4.6%. This is a full percentage point above the Footsie's forward average. And, as you can see, the yield rises through to 2026 amid the City's hopes for continued dividend increases.
| Year | Dividend per share | Dividend growth | Dividend yield |
|---|---|---|---|
| 2024 | 200,20p | 4% | 4.6% |
| 2025 | 212.30p | 6% | 4.8% |
| 2026 | 220.80p | 4% | 5% |
As you may have noticed, Reckitt’s share price plummeted in 2024. The drop was due to growing concerns about potential litigation related to its infant formula division and the potential impact this could have on its sale. The company is being sued following the tragic deaths of babies who consumed its formulas. family Baby formula.
However, I think this threat is more than built into the company's historically low valuation, so now might be a good time to buy some shares.
I like the excellent pricing power that Reckitt's heavyweight brands have (like nurofen painkillers and Durex condoms) enjoy. I am also excited about their huge exposure to fast-growing emerging markets.
I'll do some more research on upcoming lawsuits before buying, but in my opinion this is a Footsie stock worth serious consideration.