The FTSE 100 index is made up of the UK’s top blue-chip companies. I think some of the best shares to buy now can also be found in this flagship market.
With that in mind, here are a section of FTSE 100 stocks that I would buy for my portfolio right now.
Best shares to buy now
Whenever I look for possible investments, I like to consider their past performance and future potential. While past performance should never be used as a guide to future potential, I think looking at a company’s past performance can tell us something about its strengths, weaknesses, opportunities and threats.
One FTSE 100 index company that has an outstanding growth record is Admiral. One of the country’s largest car insurers, this business has been relentlessly focused on customer service since its founding. I think this has helped the organisation capture a significant share of the UK car insurance market. And as long as this focus on customer service continues, I reckon the business will continue to attract customers.
Unfortunately, that won’t guarantee success. Insurance can be an unpredictable business. A large storm or pandemic can and has uprooted the financial plans of many insurance companies. Admiral will always face these threats. Nevertheless, I’m comfortable with the risk of investing here. That’s why I would buy the stock for my portfolio today.
FTSE 100 index income
I would also buy M&G. This wealth management group has struggled to attract investor attention over the past year. I think that could be an opportunity. The company’s brand is recognised the world over, which is a strong competitive advantage. It has also shown a willingness to return large amounts of cash to investors when times are good.
Analysts believe the group could return as much as 17.4p per share in dividends this year. That suggests a dividend yield of nearly 9% on the current share price. This distribution is far from guaranteed, however, as it is only a prediction. The company faces plenty of risks to its growth as well. Challenges such as increasing costs and regulatory demands may hurt profit. That would limit M&G’s ability to meet these dividend targets.
BAE Systems is another corporation in the FTSE 100 index I’d add to my portfolio today. I think this defence contractor offers certainty in uncertain times. The company signs multi-year defence contracts with countries around the world. These contracts guarantee a revenue stream for years and, as they are backed by countries, it’s unlikely the buyer will become bankrupt.
That said, this business isn’t without its risk. Some investors may not want to be part of the defence industry. BAE is also at risk from potential lawsuits because it operates in quite a legally sensitive sector. There are also limits on who it can and can’t sell products to, which could hit growth in the long term. The company has managed to navigate these challenges in the past, but that does not mean that it will continue to do so as we advance.
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Rupert Hargreaves owns shares in Admiral Group. The Motley Fool UK has recommended Admiral 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.