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2 FTSE 100 stocks I’d buy to profit from the stock market recovery

Many FTSE 100 stocks have seen severe declines in their share prices over the past few weeks. It’s easy to see why. The economic impact of coronavirus is likely to be significant, and it’s currently unclear when the pandemic will end.

Some FTSE 100 companies, however, appear to have the financial strength to overcome these short-term risks. What’s more, their strong brands and durable competitive advantages could lead them to produce significant returns for investors over the next few years.

As such, now could be the time to buy a range of these FTSE 100 stocks while they offer a wide margin of safety.

FTSE 100 growth champion

JD Sports Fashion (LSE: JD) is one of the FTSE 100’s most successful growth stocks of the past decade. Unfortunately, the group, which has a large brick and mortar retail footprint, is suffering significantly in the coronavirus crisis. It has had to close most of its stores across Europe.

But JD Sport’s reputation is its most valuable asset. The retailer has become the go-to destination for trainers and sportswear. That’s unlikely to change because of the crisis.

As such, the FTSE 100 stock, which is down 35% year-to-date, appears to offer a wide margin of safety at current levels.

The coronavirus crisis is unlikely to hurt JD’s brand and, when the crisis is over, shoppers are likely to return. This suggests the business will continue to create value for investors in the long run. That’s why the current decline may be an excellent opportunity for long term investors.

Booming business

Flutter Entertainment (LSE: FLTR) is one of the few FTSE 100 companies that’s seeing revenues grow this year.

In the three months to the end of March, group revenues increased 16% year-on-year. However, after the cancellation of major sporting events across Europe, sports betting revenue declined by around two-thirds.

This decline has been offset, to some extent, by an increase in online gaming revenue. A rise of 15% here shows the strengths of this business.

As well as its diversified revenue base, the FTSE 100 growth champion also has plenty of financial resources to weather the storm. The group had net cash and undrawn financing facilities of £460m as of at the end of March.

Flutter also recently completed the acquisition of Canadian online gaming firm Stars Group. This acquisition will expand the company’s presence in online casino games, which should provide further diversification against sporting events disruption.

Considering all of the above, now could be an excellent time for long-term investors to snap up a share in this gambling giant. A dividend yield of 2.2% is also desirable in the current interest rate environment.

As the company is still earning money from its online gaming operations and has plenty of cash on the balance sheet, it looks as if this dividend is here to stay.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK owns shares of Flutter Entertainment. 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.