The FTSE 100’s recent market crash may cause some investors to switch their focus to assets that could offer lower risks. For example, Premium Bonds and Cash ISAs may seem appealing. However, interest rates are expected to remain low over the medium term, so their returns could prove to be disappointing.
Likewise, an uncertain economic outlook may harm the return prospects of buy-to-let properties. As such, buying FTSE 100 shares could be a sound move over the long term owing to their relatively low valuations.
With that in mind, here are two FTSE 100 shares that could be worth buying today and holding over the coming years.
The Reckitt Benckiser (LSE: RB) share price declined by as much as 16% in the FTSE 100’s recent crash. However, it has since recovered all of those losses. It seems investors have become more positive about the prospects for the world economy.
The company’s recent results highlighted that coronavirus could have an impact on its near-term performance. It reported a decline in sales for some of its products, as supply chains have been disrupted. However, its cleaning products saw a rise in demand in some markets.
Looking ahead, Reckitt Benckiser plans to invest a larger amount of capital in its digital operations. As part of this, it expects to invest around £2bn in improving its market position across a wide range of product categories. This could improve its profitability in the long run, alongside a rise in its number of products, and a sharper focus on its fastest-growing markets such as China,
Long term, the company is aiming for annual earnings growth of 7%-9%. This prospect could improve investor sentiment towards its shares. And it could help them stay ahead of the wider FTSE 100 in the coming years.
easyJet’s (LSE: EZJ) share price continues to be relatively unpopular among investors. The FTSE 100 airline’s stock price is now down by around 57% since the start of the year. That is no surprise as coronavirus has grounded all of its aircraft for the foreseeable future. This is likely to cause its financial performance to come under pressure. And that may lead to further declines for its stock price in the short run.
However, the company’s recent trading update highlighted that it has introduced cost-cutting measures and deferred the purchase of 24 aircraft. It has also increased its funding by around £2bn, which will boost its chances of overcoming present difficulties. It now has a cash balance of around £3.3bn, which the business calculates would be sufficient to fund its operations for nine months if its aircraft remain grounded.
Although easyJet faces a significant amount of uncertainty, its low share price and relatively strong financial position could provide high return potential. As such, it could offer attractive turnaround prospects over the long run.
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Peter Stephens owns shares of easyJet and 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.