The prospects for buy-to-let investments have deteriorated over recent years. House prices have started to come under pressure in various parts of the UK, while tax changes and a more challenging buy-to-let mortgage environment have made it more difficult to produce positive net cash flow from property investments.
As such, now could be the right time to focus on FTSE 100 shares with international exposure. Not only could they provide diversity during an uncertain period for the UK economy, they may be able to capitalise on strong economic growth rates across the global economy.
With that in mind, here are two large-cap shares that could be worth buying today. They may help to bring your retirement date a step closer.
Consumer goods company Unilever (LSE: ULVR) appears to have a bright long-term future. The business has a strong position in a variety of emerging markets, where rising wages and increasing wealth means that its potential customer base is likely to grow in size over the long run. This could produce a tailwind for the business, which could lead to consistent sales and profit growth.
Although the company’s market valuation suggests investors are expecting solid growth, there could be scope for further capital gains. For example, Unilever’s price-to-earnings (P/E) ratio of 21.6 isn’t yet at its record high. Nor is it as high as the ratings of some of its global consumer goods sector peers. As such, there may be scope for an upward rerating to complement its growth potential.
With a varied range of products and exposure to a broad mix of regions across the world, the stock appears to offer a favourable risk/reward opportunity. Now could be an opportune moment to buy while short-term global economic risks remain high.
Another FTSE 100 stock with the potential to deliver impressive long-term returns is HSBC (LSE: HSBA). Its exposure to a fast-growing Asian economy could catalyse its performance, with a growing middle-class in countries such as China providing scope for rising demand for its services over the coming years.
Clearly, the present time is an uncertain period for HSBC. Short-term risks, such as the US/China trade war, could weigh on its share price performance, while the unexpected resignation of its CEO could cause investors to question its prospects. However, such risks could prove to be a buying opportunity, with the bank’s valuation now suggesting it offers a wide margin of safety.
For example, HSBC trades on a P/E ratio of just 10.6. This indicates there could be a value investing opportunity on offer, and that investors may not have factored in the long-term growth prospects offered by the business.
As such, buying a slice of the business may prove to be a sound long-term move. It could outperform buy-to-let and lead to you benefit from a lower retirement age.
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Peter Stephens owns shares of HSBC Holdings and Unilever. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK has recommended HSBC Holdings. 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.