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Forget the stock market crash! I’d buy these 2 FTSE 100 stocks in an ISA today

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The FTSE 100’s recent decline has been painful for most investors. Paper losses are likely to have been seen, often big ones. And the near-term prospects for the index could prove to be highly uncertain.

However, it is during such periods that the best buying opportunities can present themselves for long-term investors. The track record of the stock market shows that. The fact is, buying high-quality businesses while they are priced relatively cheaply can lead to high returns in the long run.

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With that in mind, here are two FTSE 100 shares which appear to offer improving outlooks. Buying them in an ISA today could lead to lucrative returns in the coming years.

Diageo

Beverages company Diageo (LSE: DGE) has recorded a 15% decline in its share price since the start of the year. It reported in February that coronavirus was negatively impacting on its performance. Since then, the company is likely to have experienced further challenges across many of its markets. As such, its profit growth could experience a sharp decline in the coming months.

Clearly, it is not possible to know how long the coronavirus pandemic will last. Nor is it possible to know, at this stage, how deeply it will affect Diageo’s financial performance. But the company’s track record is strong. It has shown it is capable of delivering growth. And its stable of popular brands, could enable it to generate high returns in the long run.

The stock currently trades on a price-to-earnings (P/E) ratio of 19.6. This is significantly higher than many of its FTSE 100 peers, despite the company’s recent share price decline. However, its exposure to fast-growing emerging markets and its sound financial position mean that it could be worth a premium valuation. Over the long run, it has the potential to generate improving returns, which could make now the right time to buy a slice of it in an ISA.

Reckitt Benckiser

Another FTSE 100 global consumer goods business that has recorded a decline in its share price since the start of the year is Reckitt Benckiser (LSE: RB). Its shares are down 8% in 2020, although they had experienced a decline prior to the start of the year due to disappointing operational performance from the business in 2019.

It plans to increase its focus on fast-growing markets such as China, while aiming to enhance its position within the growing e-commerce market. This will require significant investment in the near term, but could lead to Reckitt Benckiser enjoying higher levels of growth in the long run.

The company currently trades on a P/E ratio of 17.5. This appears to be low relative to its historic levels, and suggests that investors have priced-in the uncertainties facing the business from coronavirus and from its weak recent performance. With a range of strong brands and what seems to be a sound strategy, now could be an opportune moment to buy Reckitt Benckiser for the long term.

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Peter Stephens owns shares of Diageo and Reckitt Benckiser. The Motley Fool UK has recommended Diageo. 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.

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