Most FTSE 100 shares have been climbing in 2021. And there are some of those I’d still buy today. But what about the shares that have lagged the index this year?
They include Unilever (LSE: ULVR). Investors abandoned what they saw as risky shares last year and flocked to safer stocks like Unilever. As a result, the share price gained. But since the general stock market recovery kicked off in November, Unilever shares have fallen back.
From a high point last year, we’re looking at a 12% drop. That’s better than how things were looking in February though. At the end of that month, Unilever had lost almost 25% from its peak. I reckon it was a buy then, and I’d have had some myself had I not seen even better bargains.
Since a mini-recovery of the past few months, the shares are pretty much flat in 2021, compared to a 10% gain for the FTSE 100.
I see a risk that investors will continue to shun last year’s safe stocks, and Unilever could suffer a weak 2021. But I still see it a long-term buy, and it’s on my shortlist.
Top FTSE 100 dividend
Utilities stocks have performed poorly in 2021, though they’re starting to come back. I’m looking at National Grid (LSE: NG) right now, which fell quite hard in the first three months of the year. It’s been recovering, but the bigger picture shows weakness.
The National Grid share price is still down 10% since the stock market crash kicked off in mid-February last year. So it’s been lagging the FTSE 100 recovery, but does that make it a bargain?
National Grid has reported falling underlying earnings per share for a couple of years. But that should hopefully pick up again now, and I don’t see any long-term threat to the dividend. The 2021 dividend represents a 5.3% yield on the current National Grid share price — one of the FTSE 100’s best.
In these days of super-low interest rates, I see that as especially attractive. But it does suggest to me that the market values National Grid too lowly. Is that related to the hydrocarbon energy crisis? Though National Grid should still do fine however energy is generated, I do see some threat there.
We’re heading for an energy transition, and that could affect the entire delivery chain. Still, National Grid remains on my dividend buy list.
Falling pharma
My third choice is GlaxoSmithKline (LSE: GSK). And it does seem strange for a pharmaceuticals company to be underperforming in the pandemic. Maybe it’s because its name isn’t associated with a Covid vaccine, unlike Footsie competitor AstraZeneca?
Whatever the reason, Glaxo shares are down 14% since the crash started. And though they’ve picked up in the past few months, they still lag the FTSE 100 in 2021.
But is GlaxoSmithKline a buy now? Firstly, a lot of investors have approached the pharma business very differently in the past couple of years. That’s not surprising, with the prospect of big short-term gains from coronavirus research hovering in front of us. But I have to remind myself that pharmaceuticals is a long-term business.
And with a long-term horizon, I have Glaxo down as one to buy on the dips.