The price of gold may have risen over 15% since the start of 2019. However, the long-term growth prospects of a number of FTSE 100 shares could make them more appealing investment opportunities than the precious metal.
In fact, here are two large-cap shares that could be worth buying today and holding for the long term. They appear to offer good value for money, as well as exposure to relatively fast-growing markets which may catalyse their financial performances.
The performance of consumer goods company Reckitt Benckiser (LSE: RB) in its most recent quarter was relatively disappointing. This was largely due to weaker-than-expected sales growth in key markets such as China and the US, which impacted negatively on sales within the company’s Health segment.
In the near term, those same issues could weigh on Reckitt Benckiser’s financial performance. However, over the long run, its increasing focus on e-commerce and innovation may strengthen its financial performance. It’s still in the early part of its ‘RB 2.0’ strategy, with the full impact of a recent reorganisation yet to be felt in terms of its bottom-line growth.
The stock’s price-to-earnings (P/E) ratio has fallen to 17.5 following a recent share price pullback. This may still be higher than many of its FTSE 100 peers, but it could represent good value for money compared to its global consumer goods rivals.
As such, buying a slice of the business now may prove to be a shrewd move. Investors may be able to buy a high-quality business while it trades on a relatively low valuation, thereby providing them with a margin of safety and capital growth potential.
Another FTSE 100 stock that could offer impressive long-term total returns is Segro (LSE: SGRO). The commercial property company focuses on warehousing, which is proving to be a relatively strong growth area despite an uncertain economic outlook for the UK.
The recent quarterly update from the business showed broader trends, such as urbanisation and online retailing, are benefitting its financial performance. They are increasing demand for modern warehousing that can fulfil the flexible supply chains that many businesses, and consumers, are now seeking.
With Segro having a large development pipeline, and its rental growth buoyant, its financial prospects appear to be bright. Despite this, it trades on a price-to-book (P/B) ratio of just 1.4. This suggests the stock offers a wide margin of safety when its growth prospects are taken into account.
Certainly, there may be continued economic challenges ahead for the UK. The general election and Brexit may produce unfavourable operating conditions in the short run for many of Segro’s tenants. But in the long run, the company appears to be well-positioned to benefit from structural change, which could translate into high returns for its investors.
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Peter Stephens owns shares of Reckitt Benckiser. 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.