2 FTSE 100 stocks I’d buy in the stock market slump

macro shot of computer monitor with FTSE 100 stock market data in trading application

Today is not a good day for the FTSE 100 index. As I write this afternoon, it has fallen by 2% from the last close. And in the past month it has fallen even more, by almost 5%, indicating that investors’ notional losses have become bigger over time. 

That said, one month is not an indicator of any stock’s real value. A year ago, the FTSE 100 index was still below the 7,000 mark. And despite the latest stock market weakness, it is still around 3.5% higher over the past year. This shows that there are still constituent stocks that are in a better place than they were in 2021. 

AstraZeneca is a good defensive

It is such FTSE 100 stocks that I would like to buy now. One is the pharmaceuticals company AstraZeneca (LSE: AZN), which is trading at a share price below £100 for the first time in the past month as I write. In the recent past, I have taken the opportunity to buy this otherwise strong stock on dips. And that has held me in good stead. 

It is a pricey stock, to be sure. In absolute terms, it is among the priciest across all FTSE 100 constituents. And even in relative terms, it is far from being cheap. It has a price-to-earnings (P/E) ratio of almost 57 times. But, in all the time that I have tracked it, the stock has never been cheap in either absolute or relative terms.

With rising risks of a recession, I reckon that the premium on it will only increase now. It is a solid defensive stock that is likely to be a go-to for investors at an uncertain time. Its financials look healthy and its outlook is good too. I will add more of it to my portfolio now. 

SSE is among the most promising FTSE 100 stocks

Another FTSE 100 stock I like is the green energy company SSE (LSE: SSE). Since the start of the year, it has risen by 9% and over the past year it is up by more than 25%. This is just a sign of the times we are living in, in my view.

Rising oil and gas prices have raised the overall cost of living, and the inflation situation is only expected to get worse before it gets better. The dependence on Russian energy has put many countries in an uncomfortable position in the recent months, to say the least. Increased focus on renewable energy production is probably a direct result of this.

SSE is the biggest renewable energy producer in the UK, which explains why its share price has rallied in recent months while many financially strong companies’ stock prices have dropped. I expect that it will continue to make gains over time. There could be speed bumps along the way, because a poor economy impacts all sectors, even if utilities are impacted somewhat less than others. Over time, though, I expect this one to come out ahead. Which is why I already hold it in my portfolio. 

The post 2 FTSE 100 stocks I’d buy in the stock market slump appeared first on The Motley Fool UK.

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Manika Premsingh has positions in AstraZeneca and SSE. 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.