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The economy is not bubbling with bright optimism at the moment. But I still think there are many individual stocks that could help me grow my wealth in the years to come if I buy now.
Here are two FTSE 100 Shares I would happily buy for my portfolio today at a profit of £500. And I would split the money equally between both choices.
For growth, I choose a retailer JD Sports (LSE: JD) has seen the retailer’s shares fall 43 per cent over the past year. But that seems overdone to me.
JD has a strong position in its home market in the UK. But it has a massive international operation that spans countries from the US to Australia. I think it can provide a platform for future sales growth. The company’s retail model is very profitable. Last year the company reported revenues and profits and expects to perform at similar levels this year.
There are many retailers in the FTSE 100 and an economic downturn could squeeze profits in the sector, so why would I consider adding more JD Sports shares to my existing holdings?
I think the long-term demand outlook for sports and leisure wear is strong. JD is an experienced operator with attractive profit margins compared to some retail locations. Last year, for example, the profit margin after tax was 5.3% compared to 2.5% at Tesco.
The recent management changes have not kept investors, but the company has a successful formula and I think it can continue to benefit from it. I see great growth opportunities for JD and am happy to hold the stake in my portfolio for the long term.
Many FTSE 100 stocks currently have attractive earnings prospects. It’s a property manager I already own and would happily spend more money on. M&G (LSE: MNG)
In my view, the wealth management industry has a bright future. Over time, I expect people will still want to save and invest, which should bode well for asset managers. But the short-term outlook is less rosy. Market volatility is causing some investors to pull their money out of funds, threatening profitability in the industry.
Does that make now a good or bad time to invest in asset managers? Like some peers, M&G shares have largely held their value over the past year, slipping less than 5%. I think it reflects investors’ enthusiasm for the company’s earnings outlook.
M&G not only has a dividend yield of 9.4%, but aims to maintain or increase its payout every year. If he can deliver on that promise, unsecured, I think the current stock price would be a great value.
The business will benefit from some things that can help you now and in the future. A strong brand name, long heritage and high existing customer base help M&G continue to attract and retain customers. I would happily consider adding to my existing M&G shares.