I’ve been scouring the FTSE 100 for the best stocks to buy for my Stocks and Shares ISA. Here are several I think will deliver brilliant long-term returns to my UK share portfolio.
Surgical spirit
Demand for Smith & Nephew’s medical products slumped as the number of elective surgeries plummeted in the wake of Covid-19. However, things are looking up for the artificial joint and limb specialist as surgery volumes recover. The FTSE 100 firm is targeting underlying revenue growth of up to 13% this year. The uptick in coronavirus cases will surely come as some concern to the company and its investors. But I think the investment case for this UK healthcare stock remains extremely attractive thanks to Smith & Nephew’s cutting-edge products and strong sales growth in emerging markets. Underlying sales to developing regions rocketed 16.1% in 2019.
Orders are booming
The amount world governments spent on defence soared by 75% over the past two decades. This is explained in large part by military action in the Middle East and Afghanistan. While Western participation in these arenas is greatly reduced, all the signs are that BAE Systems’s products are likely to remain strong. Total spending on armaments hit its highest levels since the late 1980s last year.
BAE Systems too recorded total orders worth £20.9bn, up almost £2.5bn from 2019 levels. It’s true that the economic impact of a long battle against coronavirus could dent arms budgets in the short-to-medium term. But I’m not convinced Western governments will cut defence spending as the perception of a growing threat from China and Russia rumbles on.
A tasty FTSE 100 choice
A bright outlook for the food delivery market provides terrific opportunities for FTSE 100 firm Domino’s Pizza Group, in my view. I think it’d be a mistake to assume that online delivery has peaked following recent Covid-19 lockdowns. Analysts at Lumina reckon the British foodservice delivery market will be worth £12.6bn in 2024, up from £11.4bn last year. It’s a trend I expect Domino’s to make huge profits from thanks to its market-leading brand and the investment it’s making in its store estate. I think it’s a great buy despite intense competition from the likes of Deliveroo and Just Eat.
The investing powerhouse
I’m not expecting the Bank of England to raise interest rates any time soon. Indeed, I think the recent Covid-19 surge on these shores will keep rates locked around record lows longer than most of us expected a few months ago. This bodes well for investment service providers like FTSE 100-quoted Hargreaves Lansdown as savers look for better ways to use their cash. The number of active clients on the firm’s books has doubled over the past five years and ended 2020 at 1.41m as low rates endured. I’m expecting rising concerns over the State Pension to fuel demand for its services, too, although a failure to keep up with its competitors in terms of its digital proposition could significantly harm future profits.
