Recently, I’ve been looking for FTSE 100 shares to buy today to profit from the global economic recovery.
There are three companies I believe are well-positioned to earn handsome returns as growth accelerates. As such, I reckon these are some of the best shares to buy today and would add them to my portfolio.
FTSE 100 shares
The first company on my list is the financial data group Experian (LSE: EXPN). This company has carved out a niche for itself in the gathering and processing of consumer financial data. Its size and experience means it has a virtually unrivalled trove of consumer data, which gives it a substantial competitive advantage.
As the global economy recovers, I think there will be increased demand for consumer finance products. This could translate into a boon for Experian, which makes money when financial services firms request data. These are the primary reasons why I think this is one of the best shares to buy today.
However, the firm also faces significant risks and challenges. The largest of which is the potential for a cyberattack, which would decimate the company’s reputation with consumers and institutions alike.
Despite this risk, I’d buy the FTSE 100 company for my portfolio.
Best shares to buy today
Another company I’d buy for my portfolio of FTSE 100 stocks is DCC (LSE: DCC). This is another business that has a solid competitive advantage. In DCC’s case, it’s the firm’s size.
Logistics can be a low margin business, but DCC can use its economies of scales to increase margins and profitability. Management has also been reinvesting profits into acquisitions to improve growth. The company’s latest acquisition was primary-care supplier Worner for €80m.
This strategy has enabled the company to increase pre-tax profit from £248m for the financial year ending March 2017 to £311m for the fiscal period ending March 2020.
I’m confident management can continue with this strategy, which is why I’d buy the FTSE 100 business for my portfolio of growth stocks.
That said, it can be easy for companies to spend too much on acquisitions. Considering the low profit margins in the distribution industry, if DCC ends up overspending, it could quickly find itself in a precarious financial position. That’s the main risk facing the group.
Building back better
Finally, I’d acquire steel group Evraz (LSE: EVR) for my portfolio. Booming demand for steel has sent the price of iron ore up to record levels recently. I reckon this suggests the outlook is bright for steel producers such as Evraz.
The company owns every stage of the steel production process, from the iron ore mines to the steel foundries. Once again, this gives Evraz a competitive advantage and an edge over other groups. It has also shown a willingness to return lots of capital to investors when profits are high.
Analysts are forecasting a dividend yield of 8.1% on the shares for the year ahead. However, this is just a projection at this stage. There’s no guarantee the stock will yield 8.1% this year.
What’s more, commodity prices can fall just as fast as they rise. As such, Evraz’s high profits may not last for long.
Even after taking these risks and challenges into account, I’d buy the FTSE 100 stock today.