As a long-term investor, I think there is never a bad time to invest in a good stock. But some times maybe better than others. It is for this reason that these two FTSE 100 stocks are on my radar for April:
#1. AstraZeneca: overdue comeback for this top stock
The Covid-19 vaccination star, AstraZeneca (LSE: AZN), has seen quite the fall in the recent days. Soon after vaccine discoveries, the company’s pricey shares were suddenly less attractive to investors.
When question marks started appearing about both the efficacy of the vaccine and its side-effects, investor confidence in the share was probably shaken further. From its all-time highs in July last year to earlier this month, the AstraZeneca share price had dropped more than 27%.
But I think that the worst may just be over for the share for two reasons:
1) It releases results for the first quarter of this year in April. If the update conforms to the positive growth trends seen in recent times, I think it will underline the value of AstraZeneca to investors irrespective of vaccine-related challenges.
2) Its earnings ratio has become relatively competitive with the recent price decline. It is still high, at 41 times. But it is lower than that for other FTSE 100 safe-stocks or defensives like water and sewage services provider Severn Trent and hygienist and pest-control provider Rentokil Initial, whose ratios are closer to 50 times.
The AstraZeneca share price has already started rising, and barring any untoward developments, I reckon it will strengthen its position in April, making it a top stock for me.
The one concern I have about the AstraZeneca stock is the potential reputational damage it can suffer if questions on its Covid-19 vaccine persist.
#2. Royal Dutch Shell: returning to profits
2020 could not have been worse for FTSE 100 oil biggies like Royal Dutch Shell (LSE: RDSB) and BP. But it appears that they are more than ready to make up for last year’s setbacks now.
Even with some recent fall, crude oil prices have still made significant gains since November last year. With the outlook for travel improving and the easing of lockdowns, oil prices should stay elevated, which is positive for Shell.
With improved market conditions, I am also hopeful that it will increase its dividend, which in turn should be positive for its share price too. I will be looking out for its dividend update when it releases its first-quarter results for 2021 next month. For its improved prospects, Royal Dutch Shell is one of the top stocks for me for next month.
There are risks to buying it, though, for the long-term. The fossil fuels industry is going through a sea change. We do not know if the oil giants will be able to pull off the transition, so an investment into Shell will need to be reconsidered over time.