The FTSE 100 index of leading UK shares has risen 25% over the past year. To me, that suggests some shares may not now be the bargains they were a few months ago. But when I consider the best shares to buy today, I still think the FTSE 100 throws up some attractive options.
Here are two FTSE 100 shares I’ve bought this year that I still consider among the best shares to buy today.
Looking to economic recovery
With memories of the last financial crisis looming large in investors’ minds, I wasn’t surprised to see many bank stocks tumble last year.
Since then, sentiment about the sector has improved. The economic impact of the pandemic on banks has been less than initially feared.
That helps explain why shares in Lloyds (LSE: LLOY) have put on 48% over the past year. That is an impressive performance. But even now I think the bank could be among the best shares to buy today for my portfolio.
Its focus on the UK means that it is heavily exposed in the event that the British economy turns down. But I like the simplicity it brings to the investment case. Lloyds is close to a pure play on the performance of UK banking. With the biggest mortgage book of any UK bank, it is set to reap the rewards of a housing market that continues to be buoyant.
One of my best shares to buy today
The bank has resumed dividends, at the maximum level allowed by its regulator. Even after the difficulties of last year, the bank still turned a post-tax statutory profit of £1.4bn. That’s over £4m a day, even amid a pandemic. That underlines the strength of the business model in my view.
Lloyds’ strong brand and focussed model appeal to me. However, risks include a management transition and also any weakness in the UK housing market.
FTSE 100 consumer goods giant
Another FTSE 100 company which I rate among the best shares to buy today is Unilever (LSE: ULVR). It’s put on 10% since the start of last month. But over the past year its performance has been flat, with a share price increase of less than 1%.
I think the company’s collection of brands such as Dove, Domestos, and Hellmann’s gives it the sort of business moat that should help it thrive long into the future. But I also like the company’s global reach. By selling low-cost as well as more premium brands, Unilever is able to tap into growth in developing markets and accommodate the aspirations of wealthier customers.
With a price-to-earnings ratio of 19 and a dividend yield of 3.6%, I rate the company among the best shares to buy now. I think the brands can help it with pricing power, demographics of developing markets work in its favour, and an experienced management team will help keep the company relevant.
However, risks include rising input costs and the possible dampening effect on demand of a tighter economy in many markets.
