Investing £1,000 or any other amount in FTSE 100 shares right now could produce improving total returns over the long run. Indeed, while short-term risks to the index’s outlook do exist, over the long run, blue-chip stocks have an excellent track record.
As such, buying FTSE 100 growth and income champions, like the two companies profiled below, could help you boost the size of your financial nest egg.
FTSE 100 growth champion Flutter
Over the past few months, investors in FTSE 100 growth stock Flutter Entertainment plc (LSE: FLTR) have seen the size of their investments grow by 100%. Since reaching a one-year low of 5,500p at the end of March, the stock has since doubled in value.
As one of the world’s largest gaming groups, Flutter has been able to avoid the worst of the coronavirus crisis.
Its latest trading update showed a 10% year-on-year increase in group revenue for the second quarter. That’s despite the widespread disruption to global sporting events in the period. An increase in poker and gaming revenue offset a decline in sports betting revenues.
Flutter’s performance during the past few months is hugely positive. It also suggests that the company is on track for a strong performance in 2020.
The FTSE 100 stock is currently dealing at a PEG ratio of 0.9, which suggests that it offers a margin of safety at the current price. Analysts are expecting earnings to double over the next two years.
Considering all of the above, now could be the right time to buy a slice of Flutter while it appears to offer a wide margin of safety and growth profile relative to many FTSE 100 companies.
Smurfit Kappa
Another FTSE 100 share that could produce long-term total returns is Smurfit Kappa (LSE: SKG).
Like Flutter, Smurfit seems to be coping well with the disruption caused by the coronavirus crisis. Its latest trading update reported that the volume of packaging sold by the group during the first quarter of 2020 increased 2% on an organic basis within Europe. Volumes increased 3.5% year-on-year across the Americas.
Despite this positive performance, analysts are expecting the company’s earnings to fall nearly a third this year. The City expects higher costs to offset revenue growth.
Still, after recent declines, shares in the FTSE 100 giant are dealing at a forward price-to-earnings (P/E) multiple of just 13.7. That is below the company’s long-term average of around 15.
Therefore, it could be a great time to buy a share in this growing business at a discounted price.
Unfortunately, to preserve cash, the company had axed its dividend for the time being. But Smurfit has a solid track record of returning any excess profits to shareholders and above-inflation dividend growth. It seems highly likely that this trend will continue when the coronavirus crisis has subsided.