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Forget buy-to-let! In 2020, I’d target 7-figure wealth with these 2 FTSE 100 stocks

The FTSE 100 may have delivered a 16% total return in 2019, but it still appears to offer better value for money than buy-to-let properties.

The index contains a number of stocks that trade on relatively low valuations and offer long-term growth potential. By contrast, house price growth in the past decade has left many regions in the UK with low yields at a time when they are facing subdued rental growth as a result of economic uncertainty.

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With that in mind, building a portfolio of FTSE 100 shares may be a better means of aiming to make a million. Here are two companies that could be worth buying within a diverse portfolio of stocks.

Compass

Support services company Compass (LSE: CPG) experienced an encouraging 2019 financial year. Its latest results showed a strong performance in North America. This helped to offset weakness in parts of Europe, where macroeconomic uncertainty has weighed on some of its markets.

The company is aiming to become more efficient to counter a potential slowdown in its revenue growth. However, with its bottom line expected to rise by 7% next year, it appears to be delivering on its long-term potential.

One of the main attractions of Compass is its strong track record of profit growth. In the past five years, for example, it has reported an annualised growth rate in net profit of around 11.5%. This could mean that it is worthy of its premium valuation, with it having a price-to-earnings (P/E) ratio of 21.8 at the present time.

Clearly, there are far cheaper shares available elsewhere in the FTSE 100. But Compass’s diverse geographical exposure, sound strategy and past performance could allow it to outperform the wider index and improve your chances of making a million.

Vodafone

Vodafone (LSE: VOD) also recently released an encouraging set of results. The telecoms company returned to top-line growth in the first half of its year, and seems to be successfully implementing the strategic changes it announced in the previous year.

For example, it is investing in digital marketing. This contributed to 20% of its new customers being acquired through digital sources. It also improved its asset utilisation with further partnerships in important markets. They could make the business more efficient and ultimately lead to an improving financial outlook.

Vodafone is expected to deliver an improving financial performance over the next few years, with double-digit earnings growth currently being forecast by the market.

Clearly, it is in the early stages of implementing its revised strategy. As such, there may be challenges ahead for the business. But with its shares trading on a forward P/E ratio of 19.5, they seem to offer fair value for money if it is able to deliver on its expected profit growth. As such, now could be the right time to buy a slice of the stock for the long run.

A top stock with enormous growth potential

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Peter Stephens owns shares of Vodafone. The Motley Fool UK has recommended Compass Group. 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.