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Forget the National Lottery and Premium Bonds! I’d buy these 2 FTSE 100 shares to make £1m

Winning the National Lottery or Premium Bond prize draws is extremely unlikely. The chance of winning the former is one in 45m, while the average annual return on the latter is just 1.4%.

As such, buying FTSE 100 shares could be a much better idea when seeking to make a million. The index currently has a number of companies that appear to trade on low valuations when their prospective growth rates are factored in.

With that in mind, here are two prime examples offering long-term growth potential at the present time.

Fresnillo

Precious metals miner Fresnillo (LSE: FRES) has lagged many of its industry peers over the last couple of years. Its recent production update perhaps highlights why this has been the case. The company’s third quarter gold production is down 7% and its silver production fell by 12% compared to the same period of the previous year.

For the current year, Fresnillo expects its production to be towards the lower end of its previous guidance. As such, its bottom line is forecast to decline by 44% in the current year.

However, it’s making progress in improving its operational performance. Therefore, in the next financial year, net profit is expected to rise by 32%. This will help to offset much of the decline experienced in the current year.

With US interest rates having fallen and global economic uncertainty high, demand for gold could increase over the medium term. This may make Fresnillo a more popular stock among investors. Its price-to-earnings growth (PEG) ratio of 0.9 suggests now could be the right time to buy a slice of the business while it’s still relatively unpopular among investors.

Morrisons

Another FTSE 100 share that could offer good value for money at the present time is retailer Morrisons (LSE: MRW). The company currently trades on a price-to-earnings (P/E) ratio of 14.5. Its forecast net profit growth next year of 7% suggests it’s set to perform well despite ongoing uncertainties in the wider retail sector.

One reason for its improving financial outlook could be continued strong wage growth in the UK. When combined with an inflation rate that’s now below the Bank of England’s 2% target, consumers may be feeling less pressure on their disposable incomes than they have in recent years. This could lead to an inflationary environment for supermarket product prices following a number of years of deflationary pressure that has continued to squeeze their margins.

Morrisons recently reported a further increase in sales from its wholesale division. This could provide it with continued growth opportunities over the long run, while an increasing online presence may maintain its appeal to consumers during a period where grocery delivery is becoming increasingly popular. Therefore, its financial performance may continue to improve over the coming years.

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Peter Stephens owns shares of Fresnillo and Morrisons. The Motley Fool UK has recommended Fresnillo. 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.