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

These two FTSE 100 (INDEXFTSE:UKX) shares seem to have strong total return potential, in my opinion.

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The recent fall in the FTSE 100 means a number of stocks now seem to offer good value for money. Of course, further declines in the index cannot be ruled out due to the ongoing threat from coronavirus. But, over the long run, buying shares today could lead to impressive overall returns.

With that in mind, here are two FTSE 100 shares which seem to offer good value for money at the present time, given their growth potential. They could, therefore, be worth buying in a Stocks and Shares ISA with £1k, or any other amount, today.

Sainsbury’s

The recent quarterly update from Sainsbury’s (LSE: SBRY) highlighted the continued challenges facing the UK’s supermarkets. Its total sales declined by 0.7% in what has been a highly competitive retail environment at a time when consumer confidence is weak.

Looking ahead, similar trading conditions may be ahead in the near term. However, Sainsbury’s could produce improving financial performance as it seeks to cut costs, close unprofitable stores, and increase its investment in growth areas such as online and convenience. In addition, its plans to reduce leverage could strengthen its balance sheet and encourage investors to become more optimistic about its long-term financial prospects.

Sainsbury’s is expected to post a 3% rise in net profit next year and in 2022. While this may appear to be disappointing, its valuation suggests that investors have factored in a difficult period for the business. It has a price-to-earnings (P/E) ratio of just 10.9, which is relatively attractive even compared to some of its retail sector peers. As such, now could be the right time to buy a slice of the business while it offers a wide margin of safety.

Diageo

Another FTSE 100 company which has experienced difficult operating conditions of late is beverages business Diageo (LSE: DGE). It reported that the spread of coronavirus has disrupted its operations in China, and is likely to negatively impact on its financial outlook. This could mean that the stock misses its financial guidance in the short run, which may lead to weaker investor sentiment in the coming months.

Over the long term, of course, Diageo appears to have significant growth potential. It owns a wide range of popular, well known brands and operates in markets where growth in incomes is expected to increase the size of its customer base. It’s innovating and seeking to enhance its product differentiation versus sector peers, which also could strengthen its competitive position.

Although Diageo’s shares continue to trade at a premium to the FTSE 100, having a P/E ratio of 20.9, they could offer good value for money right now, due to their growth potential. As such, it could be an opportune moment to buy them and hold for the long run.

RISK WARNING: 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. The Motley Fool believes in building wealth through long-term investing and so we do not promote or encourage high-risk activities including day trading, CFDs, spread betting, cryptocurrencies, and forex. Where we promote an affiliate partner’s brokerage products, these are focused on the trading of readily releasable securities.

Peter Stephens owns shares of Diageo. The Motley Fool UK has recommended Diageo. 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.

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