There are at least three companies in the FTSE 100 I believe could significantly enhance my wealth by 2030. These firms have a strong position in their respective markets and have scope to expand in the years ahead.
FTSE 100 retailer
The first blue-chip business on my list is JD Sports (LSE: JD). This retailer occupies a strong niche in the UK sports footwear market. It is also expanding rapidly around the world. It is one of the few UK retailers that has been able to take market share in the US, a traditionally difficult market for these businesses.
Of course, there is still a risk that the firm could hit a wall. It could end up overexpanding, and this might lead to losses for investors.
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Management has outlined its plans to expand further in the years ahead by pushing into new markets and opening more stores. While the stock is a bit on the pricey side, I think it is worth paying a premium to buy into JD’s growth over the next few years. These are the reasons I would buy the business for my portfolio.
International expansion
I would also acquire FTSE 100 business Ashtead (LSE: AHT). The equipment rental sector can be fantastic. The initial capital costs can be demanding, but after the equipment is acquired, a company can lease it out again and again, earning a high return on investment.
Ashtead has been reinvesting its profits back into growth over the past decade, and it now has a strong footprint in both the UK and US.
Unfortunately, the nature of this market means the firm is highly exposed to the economic environment. A sudden downturn in construction activity could significantly impact the business and its growth potential.
Management may have to re-evaluate growth plans in this scenario, and the company’s expansion may not live up to my expectations.
Despite this risk, I believe there will always be demand for equipment rental services in the UK and US. That is why I would acquire the stock right now.
Buy, build, sell
The final company I believe has the potential to grow my wealth significantly over the next couple of years is Melrose Industries (LSE: MRO). The engineering group has a strong track record of buying, improving and selling engineering enterprises. Its most recent acquisition was engineering conglomerate GKN.
This strategy has produced strong returns in the past, although there is no guarantee this will continue. There will always be the chance Melrose could find itself over its head and unable to manage an acquisition. In this scenario, the FTSE 100 company may have to ask shareholders for additional cash.
Still, with the outlook for the economy improving, I believe the engineering group has scope to grow substantially over the next couple of years.
