3 FTSE 100 stocks I’d buy for my ISA in November

These FTSE 100 stocks include a family firm and a 6% dividend-yielder. Roland Head explains why he’s tempted to add them to his ISA portfolio.

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At the start of each month, I tend to top up my ISA and think about whether I want to buy any new shares for my portfolio.

This month, I’m considering three FTSE 100 stocks that I think could be great long-term investments.

Lloyds Banking Group (LSE: LLOY) is firing on all cylinders. The bank says its revenue rose 13% to £4.6bn during the third quarter, mainly due to higher interest income.

Rising interest rates could provide a big boost to bank profits, but they also bring a couple of new risks. If bank profits soar while many people are struggling to pay their bills, the government might introduce a windfall tax.

The second risk is that rising rates could trigger a sharp rise in bad debt. Lloyds is the UK’s largest mortgage lender, so it’s exposed to the risk of rising arrears when homeowners are forced onto higher rates.

Lloyds says it hasn’t seen any sign of rising bad debts yet. However, the bank has already accounted for £1bn of expected future losses this year, in recognition of this risk.

A UK recession could hit Lloyds’ profits. But the bank’s balance sheet looks strong to me, and I think the 6% dividend yield looks very safe.

A family-owned business I’d buy

Food and fashion group Associated British Foods (LSE: ABF) owns brands including Primark, Twinings and Kingsmill. The last couple of years have been tough, especially for Primark, which doesn’t sell online.

Profits are still well below the peak levels seen in 2017/18. But ABF went into the pandemic with plenty of cash and minimal debt. This strong financial position has allowed the family-controlled group to orchestrate a strong, planned recovery.

Short-term risks remain. Primark is only just starting to experiment online, but rather from a click & collect perspective than selling direct. High commodity costs and supply chain problem could also continue to cause disruption.

However, I admire the long-term focus of this business, which is still run and controlled by the founding Weston family. ABF shares currently trade in line with their book value, on just 10 times forecast earnings. I reckon the stock looks good value at this level.

An overlooked FTSE 100 stock?

My final pick is FTSE 100 cement and aggregates group CRH (LSE: CRH). This business operates throughout Europe and North America. Its UK operations include building materials company Tarmac.

I’ve tended to overlook CRH over the years. But with the shares down 25% so far this year, I’m starting to think this business could be a good long-term buy.

CRH’s products are essential to many industries, while the company’s size is allowing it to invest in cutting carbon emissions and becoming more sustainable.

This FTSE 100 stock looks reasonably priced to me, with a price-to-earnings ratio of 10. But I think the main risk is that it’s still too early to buy. If the global economy continues to slow, CRH’s earnings (and share price) could fall.

What I’m doing

I’m currently waiting for some cash to arrive in my portfolio from a takeover bid for one of my existing stocks. Until then, I plan to continue researching these stocks.

I think they all have the potential to be good long-term investments at today’s prices.

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.

Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Associated British Foods and Lloyds Banking Group. 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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