The economy is not basking in the warm glow of optimism right now. But I still think there are lots of individual shares that could hopefully help me grow my wealth in coming years if I buy them now. Here are two FTSE 100 shares I would happily buy today for my portfolio with a spare £500. And I would split the money evenly across both choices.
JD Sports
For growth, I would pick retailer JD Sports (LSE: JD). The retailer has seen its shares tumble 43% over the past year. But that looks overdone to me.
JD has a strong position in its home market in the UK. But it also has a sizeable international operation spanning countries from the US to Australia. I think that could provide a platform for future sales growth. The company’s proven retail model is highly profitable. Last year saw the company report record revenues and profits and it expects to perform at the same level this year.
There are numerous retailers in the FTSE 100 and a recession can squeeze profits in the sector, so why am I considering adding more JD Sports shares to my existing holdings?
I think the long-term demand outlook for sports and leisurewear is strong. JD is a seasoned operator with attractive profit margins compared to some areas of retail. Last year, for example, its post-tax profit margin was 5.3%, compared to 2.5% at Tesco.
Recent management changes have unsettled investors but the company has a successful formula and I think it can continue to benefit from that. I see substantial growth opportunities ahead for JD and I am happy to hold its shares in my portfolio for the long term.
M&G
A lot of FTSE 100 shares right now have attractive income prospects. One I already own and would happily spend more money on is asset manager M&G (LSE: MNG).
The asset management industry has a bright future, in my view. Over time, I expect people will still want to save and invest money, which should be good for fees at asset managers. But the shorter term outlook is less rosy. Market volatility is causing some investors to pull money from funds, threatening profitability in the industry.
Does that make now a good or bad time to invest in asset managers? Unlike some peers, M&G shares have mostly held their value over the past year, sliding less than 5%. I think that reflects investor enthusiasm for the company’s income outlook.
Not only does M&G have a dividend yield of 9.4%, it also aims to maintain, or increase, the payout annually. If it is able to deliver on that promise, which is not guaranteed, I think the current share price offers me excellent value.
The business benefits from some things that could help it now and in the future. A strong brand, long heritage and substantial existing customer base could help M&G continue to attract and retain clients. I would happily consider adding to my existing holding of M&G shares.