No pension savings? I think you can still retire wealthy with these 2 FTSE 100 stocks

The growth prospects of these two FTSE 100 (INDEXFTSE:UKX) shares could boost your retirement plans.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Buying FTSE 100 shares could be a means of improving your retirement prospects. Certainly, they may experience ups and downs in the short run due to economic challenges facing the world economy. But in the long run, they may offer high returns that can catalyse your retirement nest egg.

With that in mind, here are two FTSE 100 shares that appear to offer good value for money and long-term growth potential. Buying them now could boost your retirement prospects and help you to beat an inadequate State Pension.

Taylor Wimpey

Political risk seems to be weighing on the share prices of housebuilders such as Taylor Wimpey (LSE: TW). The company’s recent updates have suggested that demand for new-build properties has been strong, and this has enabled the business to deliver improving financial performance.

Despite this, investors are cautious about its outlook. The stock currently trades on a price-to-earnings (P/E) ratio of just 8.5. This could mean that there is a margin of safety on offer for investors, with the company having the potential to benefit from high demand for new homes in the long run.

Clearly, changes to government policies such as Help to Buy could be ahead. However, continued low interest rates may mean that the housebuilding industry experiences further growth despite ongoing political risk.

With a dividend yield of over 10% that appears to be affordable due to Taylor Wimpey’s net cash position, its total returns could be very attractive over the coming years. Therefore, now could be the right time to buy a slice of the business while it trades on what could prove to be a low valuation.

Anglo American

Another FTSE 100 share that appears to offer good value for money at the present time is Anglo American (LSE: AAL). The mining company has enjoyed a significant improvement in its operational performance in recent years. For example, since 2012 its productivity per employee has more than doubled, while its ongoing focus on reducing costs and becoming more efficient may catalyse its financial performance in the medium term.

Clearly, economic uncertainty may lead to a challenging period for the business and the wider mining sector. Risks such as a global trade war may negatively impact on demand for a wide range of commodities. However, for an investor who has a long-term view, now could be the right time to buy a slice of Anglo American while it offers a margin of safety.

It currently trades on a P/E ratio of just 9.4. This seems to undervalue the business at a time when it is forecast to produce a rise in its bottom line of 13% in the current year. Therefore, its return potential seems to be high, with its overall strategy set to lead to a business that offers improving efficiency and growing profitability over the coming years.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of Taylor Wimpey. 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.

More on Investing Articles

Charticle

Is JD Sports Fashion one of the FTSE 100’s best value stocks? Here’s what the charts say!

The JD Sports Fashion share price remains a wild ride during the first quarter. Could it be one of the…

Read more »

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »