Have £1k to invest? I’d buy these 2 FTSE 100 shares in a Stocks and Shares ISA today

These two FTSE 100 (INDEXFTSE:UKX) stocks could deliver high returns 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.

Risks such as coronavirus, Brexit and political uncertainty in the US may cause many investors to determine that now is not the right time to buy FTSE 100 shares. After all, the index’s price level could move lower in the short term if those risks increase in size or scale.

However, at the present time, there appear to be a significant number of long-term buying opportunities within the FTSE 100. Certainly, some of its members may experience a challenging 2020, but they could provide growth potential in the coming years.

With that in mind, here are two large-cap shares that could deliver impressive performances when purchased in a Stocks and Shares ISA today.

Reckitt Benckiser

Despite reporting a 4.5% rise in its Hygiene Home segment’s like-for-like sales in the third quarter, Reckitt Benckiser’s (LSE: RB) overall performance was disappointing. Its other main segment, Health, recorded a 0.3% decline in like-for-like sales in the quarter.

As such, the company’s refreshed management team is now focusing on improving its operational performance. It will also invest in its various brands to boost sales, which is expected to reduce its margins in the near term.

While disappointing, the company’s recent performance could present a buying opportunity for long-term investors. Reckitt Benckiser has significant emerging market growth potential, and may be able to develop its presence in the direct-to-consumer channel via an investment in e-commerce. This could strengthen its market position and improve the size of its economic moat over the coming years.

The stock’s recent sales performance has caused a fall in its market valuation, with it now trading on a price-to-earnings (P/E) ratio of around 20. Compared to its historic average, this could signify that it offers good value for money. As such, now could be the right time to buy it for the long term.

Berkeley

Another FTSE 100 share that faces an uncertain near-term outlook is Berkeley (LSE: BKG). The housebuilder is focused on London, and could be negatively impacted by investor uncertainty regarding Brexit and the prospect of future trade deals. This may lead to continued low investment in the UK from international investors, which could lead to modest profit growth for the company.

Despite this, Berkeley recently announced an increase in the scale of its capital return plan. It now plans to return £1bn to its shareholders over the next two years, which is an increase of £455m on the previous figure. It also expects to increase its production and delivery by 50% over the next six years, with its prospects being underpinned by 25 long-term regeneration sites.

Although the stock has risen sharply in recent months, its P/E ratio of 15 suggests that it could offer good value for money given its long-term profit potential and strong market position in London’s prime property sector.

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 Berkeley Group Holdings and Reckitt Benckiser. The Motley Fool UK has no position in any of the shares mentioned. 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

Investing Articles

Up 26%, can the BT share price really push higher still?

The BT share price has surged on several catalysts in 2024, but there’s evidence to suggest that the stock could…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

What are the best dividend shares to buy right now?

As shares in B&M European Value Retail have fallen, the dividend yield has reached a 10-year high. Should investors be…

Read more »

Surprised Black girl holding teddy bear toy on Christmas
Investing Articles

My favourite FTSE 100 passive income stock that keeps the Christmas coffers full

The holiday season is expensive and can leave many consumers struggling to make ends meet. Here’s how I use a…

Read more »

Investing Articles

The latest growth forecasts suggest the Glencore share price will hit 555p!

Harvey Jones has been disappointed by the performance of the Glencore share price since he bought the commodity stock last…

Read more »

Dividend Shares

A closer look at the 11% dividend yield forecast for Phoenix Group shares

Phoenix Group shares have one of the highest dividend yields in the FTSE 100 index today. Could this be a…

Read more »

Investing Articles

If I’d put £25,000 into the FTSE 350 at the start of 2024, here’s how much I’d have today!

Many FTSE shares have rebounded this year as interest rates look set to keep heading lower and market appetite for…

Read more »

Investing Articles

Up 40%, but experts forecast the easyJet share price could soon hit 664p! Time to buy?

The easyJet share price has been flying lately and stock analysts are predicting more fun to come. But there's only…

Read more »

Storytelling image of a multiethnic senior couple in love - Elderly married couple dating outdoors, love emotions and feelings
Investing Articles

Worried about tax raids? Here’s how I’m targeting a £44,526 passive income with shares

Investing in a Self-Invested Personal Pension (SIPP) or Individual Savings Account (ISA) can supercharge one's passive income, says Royston Wild.

Read more »