While the prospect of becoming an ISA millionaire may seem unrealistic to some investors, the reality is that a number of FTSE 100 companies could produce high returns in the long run that make the task increasingly achievable.
Certainly, there is a risk of paper losses in the short term. That’s especially the case at the present time, with the world economy currently facing an uncertain period due to the prospect of a global trade war.
However, with the index appearing to offer a wide margin of safety, now could be the right time to buy these two large-cap stocks. Both of them could deliver high returns that, when purchased within a diversified portfolio, may increase your chances of making a million.
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Reckitt Benckiser
The growth potential for consumer goods companies such as Reckitt Benckiser (LSE: RB) appears to be exceptionally high. The company has been able to position itself within a number of emerging markets in order to capitalise on the rising wages that are leading to increasing demand for a wide range of consumer products. This may produce a tailwind for the business over the coming years and lead to a robust and fast-growing bottom line.
Since Reckitt Benckiser has a wide range of brands within its portfolio, its overall risks are reduced to some degree. Meanwhile, a recent restructuring seems to have improved the company’s efficiency, and may allow it to maximise its profit potential.
Although a change in CEO planned for September could lead to a refreshed strategy over the medium term, the company has a strong position in a variety of markets that may catalyse its stock price over the long run.
Rolls-Royce
Also offering high long-term growth potential is aerospace and defence business Rolls-Royce (LSE: RR). It is currently putting in place a revised strategy that is expected to improve efficiency and productivity through creating a leaner business that is more able to react to changes in demand across its key markets. As part of this, it has rationalised its asset base, while also reducing headcount.
Over the medium term, the company is expected to deliver improving free cash flow that may allow it to reinvest in its growth opportunities. With rising demand for defence products and services, as well as an ever-increasing number of aircraft in our skies, the prospects for the wider aerospace and defence industry could be bright.
Certainly, the recent ramp-up in the global trade war could naturally hold back the share price of Rolls-Royce to some extent. But, for long-term investors, the current uncertainty across the wider FTSE 100 may provide a buying opportunity. As such, now could be the right time to buy a slice of the stock, with its current management team appearing to have put in place a sound growth strategy.
