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Forget a Cash ISA! I’d aim to make £1m with these 2 bargain FTSE 100 stocks

While the outlook for the UK retail sector may be highly uncertain at the present time, a number of FTSE 100 retail shares offer wide margins of safety. Investors, it seems, have priced in potential challenges for the industry, which could present buying opportunities for long-term investors.

At a time when Cash ISAs offer paltry returns, FTSE 100 retail shares could hold significant appeal. Although there is a risk of loss that is not present in a Cash ISA, their long-term return potential could make them appealing from a risk/return perspective.

With that in mind, here are two large-cap retail shares that could be worth buying today. In the long run, they could help you to generate a seven-figure portfolio.

Sainsbury’s

Having fallen by around 37% in the last year, the Sainsbury’s (LSE: SBRY) share price appears to offer good value for money at the present time. The supermarket currently trades on a price-to-earnings (P/E) ratio of just 9.2, which indicates that it has a wide margin of safety.

Of course, Sainsbury’s is rumoured to be contemplating a change in management. Its low earnings growth and inability to pull off the Asda merger seems to have put additional pressure on its management team. While this may create a degree of instability for the stock in the near term, its strategy of improving the customer experience and seeking to differentiate its offering could appeal to shoppers in a highly competitive wider retail market.

Since Sainsbury’s currently has a dividend yield of around 5.6% from a payout that is covered 1.9 times by net profit, its total return potential over the long run seems to be high. As a result, it could boost your portfolio returns and help you to make a million.

Kingfisher

Another FTSE 100 retail stock that could offer significantly higher returns than a Cash ISA in the long run is DIY specialist Kingfisher (LSE: KGF). It is in the process of changing its management team, although its forecasts suggest that its strategy of focusing on efficiency is working well. In the current year, for example, it is expected to post a rise in net profit of 21%.

Despite its improving financial prospects, Kingfisher trades on a price-to-earnings growth (PEG) ratio of just 0.5. This suggests that it could offer growth at a reasonable price, and may be able to outperform many of its sector peers.

While parts of Kingfisher’s business are struggling, its exposure to different markets could provide a degree of diversity. Furthermore, its most recent update showed that it is delivering positive sales growth despite uncertain operating conditions. With the business focused on providing greater innovation and differentiation to its customers, it could deliver stronger growth than its sector peers. As such, it may offer long-term growth potential that helps you to make a million.

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Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.