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Forget buy-to-let: here are 2 FTSE 100 shares I’d buy in an ISA today

The prospects for buy-to-let investments continue to be highly uncertain. House prices in some parts of the UK are falling, tax changes are reducing the returns available on a net basis to some landlords, while a challenging economic outlook may also mean rental growth is somewhat limited.

By contrast, the FTSE 100 could offer investment potential at the present time. Its international focus, low valuation and growth potential could combine to produce a more favourable risk/reward opportunity for investors.

With that in mind, here are two large-cap shares that appear to offer improving financial outlooks. As such, they could well be worth buying in an ISA today.

Imperial Brands

While the prospect of buying unpopular shares may be viewed as risky, in the long run it can provide an investor with relatively high returns. As such, even though Imperial Brands (LSE: IMB) may not be en vogue at present, it could offer long-term investment potential.

Certainly, cigarette volume declines may cause challenges for the business in the short run. However, Imperial Brands’ pricing power may mean it can adequately offset volume declines and generate rising income from cigarettes over the coming years.

Of course, the emergence of e-cigarettes is causing a period of change for both the company and its peers. While this may mean the industry is less stable than it has been, ultimately it may create a more sustainable business that continues to offer both a growing bottom line and rising dividends.

With Imperial Brands having a dividend yield of over 9% from a payout that’s due to be covered 1.4 times by net profit in the current year, the stock seems to offer a wide margin of safety and impressive income prospects. As such, it could be worth buying while its unpopularity offers significant scope for improving returns in the long run.

Bunzl

The performance of distribution and outsourcing company Bunzl (LSE: BNZL) has been highly impressive over recent years. The business has delivered a rise in net profit in each of the last five years and is expected to do likewise in the current year.

Although the company’s recent update highlighted the uncertainty it faces in key markets, its performance has been resilient compared to sector peers. This suggests it may offer a degree of defensive appeal relative to the wider sector, while a recent pullback in its share price could also mean it offers a long-term buying opportunity for investors.

With Bunzl trading on a price-to-earnings (P/E) ratio of around 15.7, it seems to offer good value for money compared to its historic valuation range. As such, it could produce impressive capital growth over the long run, with its acquisition-focused business model already having proved highly successful in previous years.

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Peter Stephens owns shares of Imperial Brands. The Motley Fool UK has recommended Imperial Brands. 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.