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FTSE 100 stocks come in all shapes and sizes. The biggest are globetrotting monsters with tentacles here, there and everywhere, while some of the smaller ones are often raised from FTSE 250.
What they all have in common is the ability to make shareholders richer over time. Here are two Footsie fixed shares that I think are worth considering for a £20,000 ISA in April.
AstraZeneca
Let’s start with the biggest one, viz AstraZeneca (LSE:AZN). Currently, it has a market capitalization of £215bn, putting it just before that HSBC (£206bn).
Including dividends, this world-class pharmaceutical company has returned just over 100% over the past five years. Good.
One thing I like about AstraZeneca is the diversity of its locations. About 40 percent of sales come from the US, the world’s largest healthcare market, but it also has exposure to China (11%) and the UK and Europe (around 15% combined). Emerging market revenue grew 12% last year.
Another thing you might like is a reasonable estimate. Based on 2027 forecasts, the forward price-to-earnings (P/E) ratio is 16.
There is also a 1.9% yield forecast for next year. Although small, the payout is very well covered by expected revenue, suggesting that profits should increase over time.
Then again, assignments are never set in stone. And changes in drug prices in certain markets, as well as potential phase III trial failures, are unavoidable risks.
In retrospect, however, I still do well in the stock. AstraZeneca has five multi-blockbuster cancer drugs (Tagrisso, Summary, Calquence, Lynparza again Enhertu). Its oncology portfolio is growing by double digits, with Enhertu sales up 40% last year.
We have more than 100 ongoing Phase III studies, including a large and growing number of trials of our transformative technology, which have the potential to transform patient outcomes and drive our growth beyond 2030.
AstraZeneca.
The UN predicts that the world’s population will reach 9.7bn by 2050, an unprecedented number of people. This is a powerful global trend for the pharmaceutical industry.
In addition, AstraZeneca’s pipeline (and margins) could get a significant boost from artificial intelligence drug discovery in the coming years. I think this is underappreciated.
Aviva
It’s the second blue chip that I think is worth watching Aviva (LSE:AV.). Following its acquisition of Direct Line last year, the insurance company has more than 25 million customers in the UK, Ireland and Canada. More than 7m carry multiple products.
Recently, the stock is down 10%, reflecting the growing risks in the global economy, inflation and falling stock markets (it has a large asset management arm). However, this profit puts the annual dividend yield at 6.8%.
Last year, the group’s operating profit rose by 25% to £2.2bn, with a target of 11% annual growth in operating earnings per share between 2025 and 2028. Part of this will involve share buybacks, starting with a £350m buyback.
Another key pillar of this growth will be financial flexibility, particularly wealth and general insurance. Here, management says Aviva is “very strong position to deliver long-term growth“.
Finally, Aviva is releasing virtual agents (agent AI) that can handle simple end-to-end phone calls. These technological innovations can significantly reduce costs in the long run.
The forward P/E ratio here is just 10.5.
