2 FTSE 100 shares I’d buy with £2k in this stock market crash

These two FTSE 100 (INDEXFTSE:UKX) stocks could offer improving 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.

The prospects for FTSE 100 stocks continue to look highly precarious. The spread of coronavirus is showing little sign of slowing in many countries. Restrictions on movement are yet to have a clear impact on case numbers.

However, in the long run, the FTSE 100 is highly likely to recover from its current bear market. It has a solid track record of experiencing bull markets after bear markets, which could make now the right time to buy a range of high-quality stocks.

With that in mind, here are two FTSE 100 stocks that could be worth buying today with £2k, or any other amount, for the long term.

Tesco

Recent weeks have been hugely challenging for supermarkets such as Tesco (LSE: TSCO). High demand for a range of products has placed strain on its supply chain. Its shares have declined by around 14%, which is roughly half the FTSE 100’s decline over the same time period.

In the near term, factors such as weak consumer confidence and economic uncertainty may weigh on its valuation. However, the company’s recent quarterly update highlighted the progress it’s making against its strategic goals.

For example, Tesco outperformed the wider market in both volume and value terms. Its customer satisfaction ratings improved, while basket size in its online grocery segment continue to rise. This suggests the company is strengthening its competitive advantage over peers. That may give it a strong platform to capitalise on long-term growth within the wider retail segment.

Tesco’s pivot towards the UK through the sale of its international operations could improve its efficiency. Trading on a price-to-earnings (P/E) ratio of 11.9, it seems to offer good value for money at present and may deliver improving total returns in the coming years.

Severn Trent

Also falling by around 14% since the start of the year are shares in Severn Trent (LSE: SVT). The utility company has offered some defensive characteristics for investors during what has been an exceptional period for the wider market. This trend may continue in the short run, which could increase the appeal of the stock among increasingly risk-averse investors.

The company’s recent trading update showed it’s on track to meet its financial targets for the current year. This suggests it could offer a relatively reliable income outlook during an uncertain period for dividend investors. And, with its dividends forecast to rise by at least as much as CPIH (CPI inflation plus housing costs) over the medium term, Severn Trent could offer a generous income return in the coming years.

The company’s dividend yield has risen to 4.7% following its share price fall. This suggests it offers good value for money. That means its defensive business model and resilient income prospects are likely to be viewed as attractive by an increasing number of FTSE 100 investors in the coming years.

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 Tesco. The Motley Fool UK has recommended Tesco. 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

Here’s how a Stocks and Shares ISA and Lifetime ISA could supercharge my wealth!

Individual Savings Accounts (ISAs) can help UK share investors take their earnings to the next level. And their importance is…

Read more »

A person holding onto a fan of twenty pound notes
Investing Articles

A high-yield dividend ETF and an investment trust to consider this November!

Investors wanting to boost their passive income could benefit from investigating these high-yield funds and trusts, says Royston Wild.

Read more »

Investing Articles

2 of my favourite, cheap FTSE 100 growth shares this November!

These FTSE 100 growth shares could be great long-term picks to consider, reckons Royston Wild. At current prices he thinks…

Read more »

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 »