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5 of the best FTSE 100 shares I’d buy now and hold for at least 5 years

Kevin Godbold
·3-min read
Private investor buying UK shares at home
Private investor buying UK shares at home

How to go about searching for the best shares to buy now depends on the investment strategy. There are many ways to approach stock-market investing. And some strategies require shorter holding periods than others for optimum results.

But I reckon one attractive method involves finding shares that can be held for many years.

FTSE 100 shares I’d buy now

Within the UK’s FTSE 100 index are several shares that I’d be happy to buy with a holding period of at least five years in mind. In many cases, I’d want to hold for decades and compound all my gains along the way. So that means reinvesting shareholder dividends and the proceeds of any corporate actions.

Indeed, sometimes companies give shareholders extra work to do. For example, they may spin businesses off, return capital to shareholders, or merge themselves with other entities.

But a long-term holding period can lead to a quiet and calm portfolio if we choose shares carefully. And, for me, some of the most suitable stocks for a long-term investment strategy can be found among big-cap companies with defensive businesses in the FTSE 100.

Some sectors are better breeding grounds for defensive businesses than others. For example, there are some reliable cash returns to be had from sectors such as healthcare, utilities, energy, and branded fast-moving consumer goods.

Those sectors contrast with the cyclical ups and downs found in industries such as banking, housebuilding, retailing, oil production, mining, hospitality, travel, and others.

So, for me, the challenge is to find good-quality, defensive, steady cash-generating businesses operating in the most defensive sectors. And then to buy shares in those great companies at prices that make sense of a long-term investment.

Big yields in defensive sectors

I keep a watch list of the most attractive companies. And then aim to buy shares at sensible times. There are quite a few names on my list both within the FTSE 100, and the FTSE 250. And a few small-cap outfits made the list as well. But, right now, only a handful look ripe for the picking.

For example, I like the look of the pharmaceutical giant GlaxoSmithKline. With the share price near 1,416p, the dividend yield is about 5.6%. And I reckon the company will likely keep paying dividends for years to come.

I’d also go for National Grid because of its attractive regulated monopoly position in the nation’s energy infrastructure. With the shares at 889p, the dividend yield is about 5.6%. And I’m keen on water supply and wastewater removal company Severn Trent. With the shares at 2,379p, the dividend yield is running near 4.3%.

Within the fast-moving consumer goods sector, I’d go for Unilever and British American Tobacco. With the shares at 4,494p, Unilever is yielding about 3.5%. And at 2,827p, British American Tobacco has a mighty yield of around 7.8%.

The post 5 of the best FTSE 100 shares I’d buy now and hold for at least 5 years appeared first on The Motley Fool UK.

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Kevin Godbold has no position in any share mentioned. The Motley Fool UK has recommended GlaxoSmithKline and Unilever. 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 2021