2 FTSE 100 stocks that could make you incredibly rich

The FTSE 100 (INDEXFTSE: UKX) is packed with shares that could help build a fortune. Royston Wild looks at a couple that could open the door to brilliant riches.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

A mixture of brilliant profits potential and an ultra-progressive dividend policy convinces me that Ashtead Group (LSE: AHT) could prove a lucrative stock selection in the years to come.

Investor appetite for the rental equipment provider remains white hot, and it strode to fresh record peaks just shy of £18.50p per share late last week as latest trading numbers from mid-September continued to fuel sentiment.

Ashtead announced then that rental revenues boomed 17% between May and July, to £828.8m, while pre-tax profit boomed 21% to £238.5m.

Revenues at its core Sunbelt division in the US detonated 15% in the period thanks to positive trading conditions across the Pond. And latest construction market data suggests that sales should continue to surge — spending on construction projects rose 2.5% year-on-year in August, the Commerce Department said, taking growth during the first eight months of 2017 to 4.7%.

And Ashtead is splashing the cash to keep sales roaring higher, the FTSE 100 company having shelled out £377m on capital expenditure and £116m on five bolt-on acquisitions in the past quarter alone.

Start it up

In light of these factors, City analysts are expecting the rentals giant’s long-running growth story to continue. And a 14% earnings rise is forecast for the year ending April 2018, which would see the bottom line expanding by double-digit percentages. And an extra 11% increase is anticipated for fiscal 2019.

Such stunning projections make Ashtead very decent value too. Not only does it sport a forward P/E ratio of 15.5 times, but also a PEG roughly in line with the bargain watermark of 1, at just 1.1.

These sunny earnings projections also give plenty of reason for dividend chasers to jump around too. Ashtead hiked the dividend 22% in the last fiscal year to 27.5p per share, and further hefty rises are expected for 2018 and 2019, to 31.4p and 35.2p.

Subsequent yields of 1.7% and 1.9% may not be too much to get excited about right now, but I believe those looking for hot dividend growth need to give Ashtead more than a cursory glance.

Beautiful brands

I believe that Reckitt Benckiser Group (LSE: RB) is also one of the best bets out there for those seeking chunky earnings and dividend expansion long into the future.

Brands like Nurofen painkillers, Durex condoms and Dettol disinfectant — or ‘Powerbrands’ as Reckitt Benckiser likes to call them — are simply without peer. They’re goods that command intense customer loyalty regardless of broader pressure on consumers’ wallets.

And with the Footsie company investing vast sums in the development and marketing of these brands across the globe, I am confident sales should continue shooting to the stars.

My positive outlook is underlined by City forecasts which suggest that profits should keep on booming (rises of 9% and 13% are anticipated for 2017 and 2018 respectively).

And these projections are expected to feed into increasingly-pretty dividends, too — last year’s 153.2p per share payment is expected to rise to 167.4p this year and to 188.1p in 2018, estimates that carry chunky yields of 2.5% and 2.8%.

I reckon a forward P/E ratio of 20.4 times is terrific value given Reckitt Benckiser’s unbelievable defensive qualities, and expect the business to break out of its current share price downtrend sooner rather than later.

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.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Reckitt Benckiser. 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.

More on Investing Articles

Investing Articles

Would Warren Buffett buy BP shares, as oil excitement grows?

Warren Buffett is a big investor in the oil business, and BP's performance has been attracting investor attention in results…

Read more »

Cropped shot of an affectionate young couple posing with a bunch of flowers in their kitchen on their anniversary
Investing Articles

Here’s how long-term loyalty to UK shares can lead to dazzling returns!

The most successful UK and US share investors buy shares to hold for the long term, as this report shows.

Read more »

Investing Articles

NatWest has just smashed brokers’ dividend forecasts!

After NatWest delivered a Valentine’s Day surprise to investors, our writer thinks the experts may have to raise their dividend…

Read more »

Investing Articles

The NatWest share price slips in early trading despite positive FY 2024 results. What’s the deal?

The NatWest share price is down slightly this morning after the bank released its final results for 2024. Our writer…

Read more »

Young Asian man drinking coffee at home and looking at his phone
Investing Articles

My Legal & General shares have climbed just 7% — so how come I’m sitting on a 20% gain?

Harvey Jones' trading account is showing only a modest return on his Legal & General Shares, but on drilling down…

Read more »

Investing Articles

Prediction: the BP share price could rise in 2025 (or it might fall!)

Following this week’s release of the energy giant’s 2024 results, our writer reviews the prospects for the BP (LSE:BP.) share…

Read more »

many happy international football fans watching tv
Investing Articles

What’s gone wrong with the FTSE 100’s ‘King of Trainers’?

Feeling the pain of a 28% drop in the JD Sports share price over the past three months, our writer…

Read more »

Investing Articles

Is it too late for investors to consider buying these outstanding FTSE 100 shares?

Stephen Wright wonders whether now's the time to consider buying shares in the FTSE 100’s outstanding companies, despite some high…

Read more »