Gold has risen in price by around 15% in 2019. Investors have become increasingly fearful about the world economy’s outlook. When combined with falling US interest rates, this has increased the appeal of defensive assets such as gold.
While buying gold miners may provide growth opportunities for investors, physical gold could underperform the FTSE 100 in the long run. This is partly due to the attractive valuations which may be on offer across the index, as well as its track record of capital growth.
With that in mind, here are two FTSE 100 shares which could be worth buying at the present time. They may deliver improving returns and boost your retirement prospects.
The recent annual results from ABF (LSE: ABF) highlighted the advantages of its diverse business model. Despite experiencing continued weakness in its Sugar division, this was more than offset by growth in its Retail and Grocery divisions. As a result, it was able to overcome challenging trading conditions to post positive sales and adjusted profit growth.
The company continues to invest in growing its Primark value fashion business. It has proved popular in a wide range of geographies over recent years, with weak consumer confidence causing many shoppers to seek lower-priced goods from budget stores. ABF is also enhancing its customer offering through the addition of leisure activities at its new Primark stores, while offering an improving customer experience that could prove popular among shoppers.
Looking ahead, ABF is forecast to post a rise in its bottom line of 8% in the current year. Since it trades on price-to-earnings (P/E) ratio of 17, it appears to offer good value for money. As such, now could be the right time to buy it for the long term.
Another FTSE 100 share that could offer long-term growth potential is Vodafone (LSE: VOD). The company’s recent results highlighted it’s successfully implementing its current strategy, returning to top-line growth in the second quarter of the current year.
The telecoms company is seeking to provide an improved experience for its customers through a digital transformation. This may enhance its financial outlook, while the integration of the recently acquired Liberty Global assets may strengthen its growth prospects over the coming years.
The partnership agreements struck by Vodafone in recent quarters improve its asset utilisation. This could lead to synergies and greater efficiency which may translate into a rising top and bottom line over the long run.
Although the company recently rebased its dividend, it offers an income return of 5.4%. This suggests the stock could deliver impressive total returns, as it gradually implements what appears to be a sound strategy. As such, now could be the right time to buy a slice of the business for the long term.
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Peter Stephens owns shares of Vodafone. The Motley Fool UK has recommended Associated British Foods. 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 2019