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Forget buy-to-let: I think these 2 FTSE 100 stocks can help you obtain a £1m ISA

With the outlook for the UK economy being relatively uncertain at the present time, the prospects for the buy-to-let sector could be challenging.

Alongside this, many property prices appear to be overvalued versus incomes, while catalysts such as low interest rates and the Help to Buy scheme may not last in perpetuity.

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Although those same factors could impact negatively on the retail sector, there appear to be a number of FTSE 100 retail stocks that offer wide margins of safety.

As such, now could be the right time to buy these two retailers for the long term, with them appearing to have solid growth prospects.

JD Sports Fashion

Sports, fashion and outdoor brands retailer JD Sports Fashion (LSE: JD) released an encouraging trading update on Wednesday to coincide with its AGM. It has continued to achieve positive like-for-like sales growth in its core operations in the UK and internationally. The company has increased the size of its store estate, with there being a net increase of 29 stores in the financial year to 29 June. As expected, the focus has been on international growth, which represents a significant opportunity to catalyse the company’s financial outlook.

In the current year, JD Sports Fashion is forecast to post a rise in earnings of 12%. Since the company trades on a price-to-earnings growth (PEG) ratio of just 1.6, it seems to offer good value for money. With an increasingly internationally-focused business model, it seems to have an impressive outlook. Its omnichannel approach and plans to further increase the size of its store estate could boost its financial performance over the long run.


Primark owner ABF (LSE: ABF) appears to be in a strong position to deliver an improving bottom line. Although there are risks facing the wider retail sector from weak consumer sentiment as the Brexit process moves along, the company’s budget offering could prove popular among shoppers. They may trade down to cheaper alternatives, with Primark having performed relatively well in previous periods when consumer confidence has been low.

Alongside its Primark operations, ABF has a number of other divisions. They include Ingredients and Sugar. Although their performances have been mixed in recent quarters, they provide the business with a degree of diversification so that it is not wholly reliant on the retail segment for growth.

With ABF forecast to post a rise in earnings in the current year of 5% following an increase in its bottom line in each of the last three years, the company could become more popular among investors at a time when the outlook for the UK economy is somewhat uncertain.

As such, now could be the right time to buy a slice of the company, rather than invest in buy-to-let as housing affordability remains a potential threat to house price growth over the coming years.

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Peter Stephens 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.