2 ‘unstoppable’ FTSE 100 shares I’d buy for a new ISA

The FTSE 100 includes some of the world’s best businesses. Our writer explores two high-quality picks that could bring long-term rewards.

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ISA season has arrived. 6 April was the first day I could add fresh funds to my Stocks and Shares ISA.

But with new money sitting there, I’m looking at which shares to buy next. More specifically, I’m considering FTSE 100 shares.

FTSE 100’s best retailer

The first Footsie share on my hit list is UK fashion/lifestyle retailer Next (LSE:NXT). I used to own this share many years ago when it was trading at around £10. Since then, it has multiplied by a whopping nine times.

A £5,000 investment would now be worth £43,500. It’s a shame I didn’t hold onto it. But that’s in the past. Next has been and continues to be an impressive operator.

Its business strategy over the years has kept it ahead of the competition, in my opinion. For instance, it was one of the first among peers to make a push towards online sales.

Today, it continues to innovate. For instance, it now operates a Total Platform product which allows third-party brands to use Next’s infrastructure services such as IT, warehousing and marketing.

This could be a key driver of future growth, especially in a changing retail environment.

A high-quality business

Next shares offer many of the characteristics that make a quality stock. For instance, it offers a double-digit return on capital employed. It’s also a profitable business that churns out free cash flow.

This enables it to reduce debt and return excess cash to shareholders.

Bear in mind that retail consumers still face elevated cost of living pressures. Weather can also play a part in a customer’s shopping habits. And both factors can impact near-term earnings.

That said, these are short-term factors. For the long-term, I’m confident that Next will continue to be one of the leading retailers in the UK.

That’s why this time when I buy the shares, I hope I hold on to them.

The big pharma giant

Another quality FTSE 100 share I’d buy is pharmaceutical giant Astrazeneca (LSE:AZN). It’s the Footsie’s second largest company, one spot behind Shell.

Astrazeneca is a world-class player in this industry. Over the past decade it has focused on research and development. And it now offers a rich pipeline of innovative medicine across oncology, biopharmaceuticals and rare diseases.

If executed well, this should provide an excellent source of earnings growth for many years.

Oncology represents 35% of its portfolio and sales rose 23% last year. I’d note that chief executive Pascal Soriot expects “another year of strong growth in 2024, driven by continued adoption of medicines across geographies”.

Spending spree

Astrazeneca has purchased several billion-dollar companies recently. And although this could strengthen its pipeline, it doesn’t come cheap. Large acquisitions tend to come with some risk too. That said, this mega-cap has ample experience to lean on.

It trades on a forward price to earnings ratio of 16. This is broadly in line with peers, but I’d say it’s not expensive given its strong pipeline and potential.

Overall, both FTSE 100 top picks could prove to be unstoppable players in a long-term ISA. That’s why I intend to buy them both soon.

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.

Harshil Patel has no position in any of the shares mentioned. The Motley Fool UK has recommended AstraZeneca Plc. 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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