I’m searching for the best FTSE 100 shares to buy and hold in my portfolio for the next decade. Here are two I’m considering snapping up today.
Bargain buy
Consumer spending power is under pressure as the cost-of-living crisis endures. Latest data from the British Retail Consortium (BRC) shows total retail sales rose just 4.2% in January.
This was down on the three-month average of 5.2%. And this year on year rise was largely down to price inflation. In fact, the BRC said “the rise in sales masked a much larger drop in volumes”.
In this climate, snapping up value retail stocks like B&M European Value Retail (LSE:BME) could be a good idea. Low-cost operators like these are thriving as shoppers stretch their budgets as far as they can.
This FTSE 100 retailer grew like-for-like revenues 6.4% during the 13 weeks to Christmas Eve. And B&M said it put in a “very good performance” across both its grocery and general merchandise lines.
Buying value businesses like this isn’t just sound investing strategy for right now though. The budget retail segment has been growing strongly over the past decade as consumers become savvier with their cash. The breakneck rise of German discounters Aldi and Lidl is proof of this.
It’s a trend that’s tipped to run and run too. And B&M is expanding to make the most of this opportunity. It’s due to open four new stores in March alone.
Now it’s true that B&M operates in a highly competitive environment. In fact, its rivals are also rapidly building their store estates and Poundland alone plans to open or relocate 50 stores this year. But I believe the strength of B&M’s brand could still help it deliver robust shareholder returns.
Look East
Buying shares with emerging market exposure might also be a good way to generate long-term wealth. HSBC Holdings (LSE:HSBA) is one way I’m considering playing this theme.
This FTSE 100 company is increasingly pivoting towards Asia. This seems to be wise strategy, given the rate at which personal wealth levels there are rising. Financial product penetration is also low on the faraway continent too, providing plenty of scope for HSBC to grow revenues.
Encouragingly, regulators in China are loosening financial market rules to boost overseas investment as well. This could bolster economic growth across the entire region and provide added opportunities for the region’s banks.
I think HSBC is a great value stock to buy at current prices of around 600p per share. The bank trades on a forward price-to-earnings (P/E) ratio of 6.5 times. It also carries a market-beating 7.5% dividend yield.
I’m considering investing despite the threat of an upsurge of Covid-19 infections in China. I expect the firm to deliver stunning profits growth over the next 10 years.
