Are these the best stocks to buy on the FTSE right now?

As
the

FTSE
100
draws
ever
closer
to
a
new
all-time
high,
I’m
considering
three
promising
stocks
to
buy.
All
three
have
received
a
buy
rating
from
major
broker

UBS
in
the
past
month
or
so,
and
I
think
they
all
have
long-term
growth
potential.

The
stock
that
just
won’t
stop

Rolls-Royce

Holdings
(LSE:RR.)
shares
are
up
almost
200%
in
the
past
year
and
show
no
signs
of
slowing
down.
They’ve
climbed
a
further
6%
since
I
last
wrote
about
them
just
over
a
week
ago.
Based
on
future
cash
flows,
analysts
estimate
the
shares
to
be
undervalued
by
at
least
50%.

However,
the
company’s
liabilities
outweigh
its
assets,
leaving
it
with
a
£3.6bn
shortfall.
This
is
a
significant
risk
that
potential
shareholders
would
need
to
take
into
consideration.
Also,
Rolls-Royce
has
suspended
dividend
payments
until
its
financial
situation
improves.

Why
do
I
think
it’s
a
good
buy?

The
Royal
Navy
aims
to
deploy
a
fleet
of
new
Dreadnought
Class
nuclear
submarines
by
2030,
which
could
keep
the
company
in
demand
for
years
to
come.
Rolls-Royce
supplies
the
Nuclear
Steam
Raising
Plants
(NSRP)
and
other
parts
used
to
power
the
subs. 

They’re
the
best-performing
shares
in
my
portfolio
currently
and
if
I
had
the
money,
I’d
buy
more
today.

The
bank
that
bounced
back

Popular
high
street
bank

NatWest
Group
(LSE:NWG)
had
a
tough
time
during
2023.
The
share
price
fell
41%
from
a
high
of
308p
in
January
to
182p
in
October.
It
has
since
recovered
to
262p
and
I
think
it
looks
poised
to
keep
climbing.
Its

price-to-earnings
(P/E)
ratio
has
reduced
from
8.1
last
March
to
5.4
today,
indicating
the
shares
may
be
undervalued.  

However,
its
recent
Q4
earnings
report
revealed
a
12%
year
on
year
decline
in
pre-tax
operating
profit
(although
that’s
better
than
some
analysts
expected).
And
like
much
of
the
UK
banking
sector,
NatWest
is
at
risk
of
loan
defaults
if
the
economy
falls
into
a
recession.

Why
do
I
think
it’s
a
good
buy?

The
main
benefit
of
NatWest
Group
is
the
7%

dividend
yield.
With
a
35%
payout
ratio,
it’s
well-covered
by
earnings
and
has
recently
begun
paying
out
consistently.
For
this
reason,
I’ve
added
it
to
my
list
for
the
next
buying
round.

Defending
the
nation

With
a
share
price
of
£13.53,

BAE
Systems
(LSE:BA.)
is
up
37%
in
the
past
year.
Much
of
the
growth
could
be
attributed
to
increased
government
defence
spending
prompted
by
the
ongoing
conflict
in
Ukraine. Sadly,
negotiations
have
thus
far
failed
to
secure
a
peaceful
resolution. 

Naturally,
if
a
peace
deal
is
reached,
the
share
price
could
fall
as
defence
budgets
are
cut.
I’m
happy
with
the
returns
my
shares
have
delivered
so
far
and
I
plan
to
keep
holding
them,
but
an
end
to
the
war
would
be
a
preferable
outcome.
Furthermore,
despite
no
direct
involvement,
BAE
has
been
criticised
for
supplying
parts
for
fighter
jets
involved
in
the
Palestinian
conflict.

Why
do
I
think
it’s
a
good
buy?

Its
profits
extend
beyond
just
current
conflicts.
The
UK
is
on
a
mission
to
improve
its
defence
capabilities,
with
PM
Rishi
Sunak
recently
pledging
a
£200m
investment
and
declaring
it
a

“national
endeavour”.
As
one
of
the
largest
defence
and
aerospace
contractors
in
Europe,
I
think
BAE
could
benefit
from
this
initiative
for
years
to
come.