BATS, GSK, DGE: Should you buy these stocks amid slowing business activity?

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BATS, GSK, DGE: Should you buy these stocks amid slowing business activity?

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 BATS, GSK, DGE: Should you buy these stocks amid slowing business activity?
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Highlights

  • Business activity in the UK has hit a 15-month low level in May amid the rising inflationary pressures and growing geopolitical instability.
  • The S&P Global/CIPS composite purchasing managers’ index dropped to 51.8 from 58.2 in April.
  • Services PMI dropped to 51.8, while Manufacturing PMI declined to 54.6 in May.

Amid the rising inflationary pressures and growing geopolitical instability, business activity in the UK has gone through a strong slowdown in May. According to the latest S&P Global/CIPS composite purchasing managers’ index data, manufacturing and service sector activities have hit a 15-month low level of 51.8, down from 58.2 in April. This was way below the projected reading of 56.5.

UK business activity slows down in May

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Since the UK economy started recovering and getting back on track in March last year, the current rise in business activity has been the slowest, marking the most sluggish phase in the economy.

Besides, there was a decline in the services PMI below the expected reading of 57.0, tumbling from 58.9 in April to 51.8 in May. Falling below the expectation of 55.0, the manufacturing PMI also declined from 55.8 in April to 54.6 in May.

According to S&P’s chief business economist Chris Williamson, the UK economic growth has significantly slowed down in May, and as implied by future indicators, the situation may potentially get worse over time. The costs faced by companies have also been hitting the roof amid the soaring inflationary pressure, which has worsened their condition.

Amid the current turmoil, some manufacturers have been performing decently. Here are 3 UK manufacturers that investors can keep an eye on.

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  1. British American Tobacco plc (LON: BATS)

The shares of the UK-based cigarette manufacturing business, British American Tobacco plc, were up by 0.34% as the market opened at around 8:00 AM (GMT+1) on 25 May 2022, at GBX 3,520.00. The company, which is a constituent of the FTSE 100 index, has given its shareholders a return of 25.84% over the last one year as of 25 May 2022. The company’s market cap stood at £79,177.19 million as of 25 May 2022 and it is currently offering a dividend yield of 6.2% a year.

UK business activity has hit a 15-month low in May amid rising inflation

© 2022 Kalkine Media®

  1. GlaxoSmithKline plc (LON: GSK)

The shares of the British manufacturer of medicines, vaccines, and consumer healthcare products, GlaxoSmithKline plc, were up by 0.20% as the market opened at around 8:00 AM (GMT+1) on 25 May 2022, at GBX 1,785.60. The company, which is a constituent of the FTSE 100 index, has given its shareholders a return of 31.78% over the last one year as of 25 May 2022. The company’s market cap stands at £90,596.43 million as of 25 May 2022 and it is currently offering a dividend yield of 4.2% a year.

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  1. Diageo plc (LON: DGE)

The shares of the beverage alcohol firm, Diageo plc, were down by 0.04% as the market opened at around 8:00 AM (GMT+1) on 25 May 2022, at GBX 3,623.50. The company, which is a constituent of the FTSE 100 index, has given its shareholders a return of 6.90% over the last one year as of 25 May 2022. The company’s market cap stands at £83,079.61 million as of 25 May 2022 and it is currently offering a dividend yield of 2.0% a year.

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