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2 FTSE 100 stocks I’d buy with £1,000 today

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Chart displaying growth
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It goes without saying that in order to make life-changing sums of money on the stock market you need to have a huge amount of starting capital to invest in the first place, right? WRONG.

Multi-millionaires

You’ll be surprised how many investors have retired as multi-millionaires despite starting out with very limited funds. There are so many examples of London-listed companies whose share prices have multiplied by hundreds and sometimes even thousands of percentage points over the last few years, making the idea of achieving financial independence via the stock market more realistic than you might think.

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Granted, many of these highly successful growth stocks started out as more speculative small-caps, and those types of investments are perhaps understandably not everyone’s cup of tea. Many of you may be new to investing or simply risk-averse, in which case it’s probably best to put your first £1,000 of investing capital to work in rock-solid blue-chips that have a track record of delivering stable returns with comparatively low levels of risk.

Life-changing returns

That’s not to say that our FTSE 100-listed companies can’t deliver life-changing returns for their investors, indeed far from it. Packaging giant DS Smith (LSE: SMDS) for example has provided a return of no less than 1,300% for its shareholders since 2009, and that’s without even including dividends.

The £5bn business is now a leading provider of corrugated packaging in Europe, and a specialist in plastic packaging worldwide. In order to support its corrugated packaging operations, the group also includes a recycling business that collects used paper and corrugated cardboard, from which its paper manufacturing facilities make the recycled paper used in corrugated packaging. And recycling is a business that’s likely to grow in the future.

Explosion in online shopping

The London-based group boasts an excellent track record of sales and earnings growth, and with the explosion in online shopping helping to further increase demand for cardboard packaging, I think the only way is up for this boring-yet-reliable international business.

DS Smith trades on a forecast price/earnings ratio of 14 for the year to April, and offers a progressive dividend, which at today’s prices yields a very respectable 3.5%.

Digitally-focused

Another spectacularly boring FTSE 100 business that’s delivered significant shareholder returns in recent years is Relx (LSE: REL). The Anglo-Dutch group formerly known as Reed Elsevier is a global provider of information and analytics for professional and business customers across a wide range of industries.

After undergoing a huge restructuring programme the group has largely moved away from its legacy of trade journals to becoming a more digitally-focused provider of professional information services. This is likely to bode well for the future with the increasing demand for data and analytical tools helping to offset the global decline in print media.

Relx’s share price has pulled back sharply from the record highs of 1,782p achieved in November last year, and this should provide new investors with a reasonable entry point at a not-too-demanding forward earnings multiple of 17.

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Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has recommended DS Smith. 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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