3 FTSE 100 stocks to buy

Rupert Hargreaves highlights three FTSE 100 growth stocks he’d buy today based on their expansion prospects over the next few years.

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I think some of the best investments to buy right now can be found in the FTSE 100. And with that in mind, here are three blue-chip stocks I’d buy for my portfolio. 

FTSE 100 green tech

The first company is Johnson Matthey (LSE: JMAT). Not only is this one of the most established businesses in the lead index, but it’s also one of the most forward-thinking as well. 

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The chemicals and speciality materials company is now bringing its decades of experience to the renewable energy sector. It’s developing technology to help energy storage and transmission. I think this could be one of the best progressive FTSE 100 stocks to own right now. 

Not only does the business have an established portfolio and presence in speciality chemical markets, but it’s also thinking about the future. This should help underpin the group’s growth in the years to come. 

Unfortunately, this is a highly competitive market. Therefore, Johnson may struggle to compete effectively with larger US peers. So its growth isn’t guaranteed. Nevertheless, I’d buy the stock for both its existing portfolio of unique technologies and the potential it offers. 

Diversification

I like to own companies with diversified operations. I think these businesses can be better investments in the long run because diversification can provide an opportunity to profit in all market environments. 

With that in mind, I’d also buy Associated British Foods (LSE: ABF) for my portfolio of FTSE 100 stocks. This company has two main divisions, food and retail. The retail division includes Primark, which has suffered from enforced store closures over the past 12 months.

However, the food business has grown rapidly, with revenue at the grocery arm increasing 9% year-on-year at actual exchange rates in the first half of the company’s 2021 financial year. 

While the Primark business suffered last year, management has reported strong demand in the retailer’s stores as they’ve reopened. This reflects the appeal of its “value-for-money offering,” according to the group. The group is also expanding its international store count at an impressive rate.

I think this diversification will help the group capitalise on economic recovery over the next few years. That’s why I’d buy the FTSE 100 stock for my portfolio today.

Key risks to watch out for include rising costs, which could dent profit margins at both divisions. This may hurt overall group profit. Growing competition in the fashion sector and the brand’s lack of an e-commerce platform may also impact Primark’s growth. 

Red metal

The final company I’d buy for my portfolio of FTSE 100 stocks is Antofagasta (LSE: ANTO). The demand for copper may rise steadily over the next few years as the green energy revolution gains pace. One forecast suggests between 2020 and 2030, global demand for refined copper will increase 31%.

Antofagasta is the largest copper-focused miner listed on the London market. In Q1, the company produced 183,000 tonnes of copper and 59,100 oz of gold. Forecasts suggest production will increase into the second half of the year. The miner is also spending billions of dollars on increasing output over the next few years. 

This spending will yield results if copper prices continued to increase. But that’s not guaranteed. Commodity prices can just as easily fall. This is the most considerable risk facing Antofagasta right now. 

Despite this headwind, I’d buy the stock for my portfolio of FTSE 100 shares. 

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Rupert Hargreaves has no position in any of the shares mentioned. 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.

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