2 FTSE 100 shares to buy

Rupert Hargreaves explains why he believes these are some of the best FTSE 100 shares to buy, considering their growth potential.

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When it comes to finding investments, I like to focus on blue-chip stocks. With that in mind, here are my top two FTSE 100 shares to buy right now. 

FTSE 100 shares

The first company on my list is marketing group WPP (LSE: WPP). Last year, as companies worldwide slashed advertising spending to save cash in the pandemic, WPP’s sales plunged. The enterprise took evasive action to cut costs and preserve money and, luckily, these efforts are now starting to pay off.

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Business activity has returned to 2019 levels a year ahead of management projections. Revenues increased 16.1% on a like-for-like basis in the group’s first half. Operating profit rose to £484m from a loss of £2.8bn last year. Moreover, net debt declined to £1.5bn, down £1.2bn year-on-year. 

With profits surging, management announced a £350m share buyback in the second half and increased the company’s interim dividend by 25%. 

As the economy continues to recover from the pandemic, I think WPP’s sales and profits will continue to recover. That’s why I reckon this is one of the best FTSE 100 shares to buy right now, especially as it seems management is committed to returning additional cash to investors.

Possible risks to the company’s growth include competition in the advertising sector and another wave of virus lockdowns. As in the first set of lockdowns, these could severely impact advertising spending. 

Despite these risks, I’d buy WPP for my portfolio today. 

My shares to buy

The other company on my list of FTSE 100 shares to buy right now is the asset management group St. James’s Place (LSE: STJ)

Recently, several asset managers have reported that their clientele is getting younger. This reflects two trends, according to analysts. First, the pandemic has inspired a generation of young people to become more interested in finance. And second, the older generation is starting to pass on more wealth. 

I think this transfer could be incredibly beneficial for wealth managers such as St. James’s Place. Indeed, as one of the largest and best-known group’s in the country, it could benefit more than most.

The group reported net asset inflows of £5.5bn in the first half of 2021, increasing funds under management by around 8.6% on an annualised basis. This growth is quite impressive, and it helped the company more than double operating profit for the period. 

Management is also reinvesting profits back into growth. It’s hired 139 new advisors across the group in 2021 so far. It’s also enrolled 277 students in its wealth manager academy programmes. 

Considering all of the above, I think this company has one of the brightest outlooks of all FTSE 100 shares. That’s why I’d buy the stock for my portfolio today. 

However, while I think this is one of the best shares to buy, I am also aware it faces plenty of risks. Key challenges include competition from lower-cost competitors. Additional regulations may also increase the firm’s cost base and weigh on profit margins. And if there is a stock market crash, investors may rush to pull their funds from the group.

These risks may mean the stock isn’t suitable for all investors. Other FTSE 100 shares may be more suitable in this case. 

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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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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