Forget buy-to-let! I’d buy these 2 FTSE 100 stocks today to make a million

These two FTSE 100 (INDEXFTSE:UKX) shares could offer long-term growth potential, in my opinion.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

Investing in buy-to-let has been a popular means of generating high returns in the past. For many investors, it’s enabled them to generate seven-figure wealth due to rising house prices and low interest rates.

However, an uncertain economic outlook and rising taxes mean that the future for buy-to-let investors could be somewhat challenging. As such, now may be the right time to buy FTSE 100 shares which appear to offer long-term growth potential. Here are two such companies that could increase your chances of making a million in the coming years.

Unilever

Consumer goods giant Unilever (LSE: ULVR) has experienced an uncertain period of late. Its fourth quarter results were slightly disappointing, while the spread of coronavirus seems likely to negatively impact on its financial performance in the current year.

Should you invest £1,000 in Next right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Next made the list?

See the 6 stocks

As such, its share price has fallen by around 18% over the past five months. In the near term, a further decline would be unsurprising, since investors may demand a wider margin of safety, due to the potential for further disruption from the coronavirus outbreak.

However, in the long run, Unilever seems to be well-placed to capitalise on emerging market growth due to its exposure to fast-growing economies. It’s also becoming increasingly focused on sustainability, with its brands likely to remain highly relevant and popular as consumer tastes evolve.

Therefore, while the stock trades on a price-to-earnings (P/E) ratio of 19, which is lower than it has been in the past, it could offer long-term investment potential. Its bottom line is forecast to rise by 7% in the current year and next, which suggests it has the potential to deliver a successful share price recovery in the coming years following its recent fall.

Next

Another FTSE 100 share which faces a challenging operating environment is fashion retail giant Next (LSE: NXT). Weak consumer confidence, changing consumer tastes, new technology and an uncertain UK economic outlook have contributed to a general slowdown in the retail sector over recent years.

However, Next reported in its Christmas trading statement that its sales over the festive period were 1.1% higher than its internal forecast at 5.2%. This provides further evidence the business is able to outperform many of its retail sector peers, having a strong track record over the past couple of decades in adapting to changing consumer tastes and difficult market conditions.

Its investment in online sales could provide a growth catalyst over the long run. Although it now trades on a P/E ratio of 13.7 following its buoyant share price performance over recent months, Next seems to be well-placed to generate improving profitability over the long run. As such, now could be the right time to buy a slice of the business while investor sentiment towards the wider retail sector continues to be weak.


Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of Unilever. The Motley Fool UK owns shares of and has recommended Unilever. 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.

More on Investing Articles

Rolls-Royce's Pearl 10X engine series
Investing Articles

Rolls-Royce shares have reached £10. Too late to buy?

Selling for pennies as recently as 2022, Rolls-Royce shares recently topped a tenner apiece. Our writer assesses whether he's too…

Read more »

UK coloured flags waving above large crowd on a stadium sport match.
Investing Articles

Meet the $2 stock up 366% that UK investors are piling into

UK stock investors have been snapping up this meme stock recently. Incredibly, it has more than quadrupled since June! What's…

Read more »

Middle-aged Caucasian woman deep in thought while looking out of the window
Investing Articles

Down 49%, is this well-known name the deep-value stock it seems?

Our writer has been tempted to add more B&M shares to his portfolio after a recent tumble. So what's holding…

Read more »

Abstract 3d arrows with rocket
Micro-Cap Shares

After falling 80% from a 52-week high, is this penny share a screaming buy?

This penny share company skyrocketed earlier this year, but the share price has since fallen back. Is it a new…

Read more »

British Pennies on a Pound Note
Investing Articles

This penny stock rose 49% in a year. Here’s why it may still be a terrific bargain

This penny stock has soared by 49% in 12 months -- but still sells for far less than the sum…

Read more »

Businessman using pen drawing line for increasing arrow from 2024 to 2025
Investing Articles

MHA is a UK stock market success story that deserves your attention

MHA listed on the UK’s stock market in April and has performed extremely well. Dr James Fox explains why the…

Read more »

A senior man using hiking poles, on a hike on a coastal path along the coastline of Cornwall.
Investing Articles

£20,000 in savings? Here’s how a Stocks and Shares ISA could generate £621 a month of passive income – tax-free!

Christopher Ruane explains how a Stocks and Shares ISA could potentially generate sizeable long-term passive income streams from proven businesses.

Read more »

A rear view of a female in a bright yellow coat walking along the historic street known as The Shambles in York, UK which is a popular tourist destination in this Yorkshire city.
Investing Articles

Up 269% in 5 years, could the Marks and Spencer share price go even higher?

Christopher Ruane explains some of the reasons the Marks and Spencer share price has boomed in recent years -- and…

Read more »