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2 FTSE 100 shares I’d buy in a Stocks and Shares ISA to get rich and retire early

Royston Wild
·3-min read
macro shot of computer monitor with FTSE 100 stock market data in trading application
macro shot of computer monitor with FTSE 100 stock market data in trading application

It’s been an extremely bumpy year for many FTSE 100 investors. The brief rally following the stock market crash of late February and early March ran out of steam almost immediately. As I type, the Footsie trades a full 25% lower from its levels at the start of 2020.

In fact, the FTSE 100 has just slipped to its lowest for almost seven months to around 5,500 points. And further drops beyond 2020’s multi-year lows can’t be ruled out as coronavirus infection rates soar. I know what I’ll be doing if UK share prices slump again. I’ll be buying more quality shares for my Stocks and Shares ISA at their knocked-down prices.

Here are two FTSE 100 shares I’m already thinking of adding (or indeed, buying more of) for my portfolio today:

A blue-chip UK share I already own

Ashtead Group (LSE: AHT) was the best-performing FTSE 100 stock of the 2010s but it’s not got off to a flyer in this new decade. The impact of Covid-19 lockdowns on construction activity across the globe — and, as a consequence, falling demand for its rental equipment — has been significant. As a consequence, its pre-tax profit slipped 35% in the three months to July.

As an Ashtead shareholder, I hope that rising Covid-19 infections won’t cause builders to down tools again. But even if they do, I’m confident this UK share will still deliver terrific long-term returns.

Rampant acquisition activity was the bedrock of the brilliant profits growth of the past decade. And the company is still generating shedloads of cash to help it continue building its market share through M&A action. Indeed, there could be plenty of distressed rivals available to be bought for a knock-down price following this fresh economic downturn.

City analysts reckon Ashtead will bounce from a 29% earnings drop in the current financial year (to April 2021) and record a 32% bottom-line rebound in fiscal 2022. The company’s elevated forward price-to-earnings (P/E) ratio of 24 times isn’t that tasty at first glance. But the exceptional form of this FTSE 100 firecracker in recent years makes it worthy of a fat premium, in my opinion.

A dirt-cheap FTSE 100 hero

The long-term profits outlook for GVC Holdings (LSE: GVC) also looks quite robust. It’s not just that the online betting market is set to continue exploding (a Verified Market Research report suggests the global market will grow at a compound annual growth rate of 11% through to 2026). It’s that this FTSE 100 share has some of the industry’s most popular brands like bwin, Ladbrokes and partypoker.

It also has a broad geographical footprint and is building momentum in the gigantic US marketplace too. In 2021, City analysts expect earnings at GVC to rocket 29%, a vast improvement from the 13% decline forecast for this year. And, as a result, this UK share trades on a rock-bottom forward price-to-earnings growth (PEG) ratio of 0.5. Throw in a chunky 3.6% dividend yield too, and I think it’s too good to miss.

The post 2 FTSE 100 shares I’d buy in a Stocks and Shares ISA to get rich and retire early appeared first on The Motley Fool UK.

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Royston Wild owns shares of Ashtead Group. The Motley Fool UK has no position in any of the shares mentioned. 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.

Motley Fool UK 2020