I think there are currently lots of great investments in the FTSE 100. The blue-chip index contains the UK’s largest listed corporations and I believe these companies could benefit from rising sales and profits if the economy recovers over the next few months.
With that in mind, I think these are the best FTSE 100 shares to buy today with an investment of £5,000.
Best shares to buy today
While the outlook for the economy has improved markedly over the past few months, it’s still highly uncertain. As such, I want to own shares in companies that have either performed well throughout the pandemic or those which may be insulated from further uncertainty.
Unfortunately, just because a company has performed well over the past 12 months doesn’t mean it will continue to do so. However, by focusing on these FTSE 100 businesses, I reckon I can swing the odds of success in my favour, rather than trying to guess which organisations may succeed going forward.
Despite the unprecedented challenges this company has faced over the past 12 months, it reported a robust trading update for the year ended 31 December 2020. Revenue increased by 9.4% at constant exchange rates. Adjusted earnings per share jumped nearly 27% of the back of this growth.
Bunzl benefitted from what management called “larger Covid-19 related orders” in 2020. But it doesn’t expect these orders to be repeated in 2021.
However, Bunzl’s increase in profitability has provided the company with more capital to reinvest in growth. This is why I believe the corporation is one of the best shares to buy today. Last year, the group invested £445m in acquisitions. It has already announced a handful of deals this year as well.
So, while the company is unlikely to see a repeat of 2020’s performance, I think it’s well-positioned to grow in the years ahead.
That said, the FTSE 100 company isn’t without its risks. Acquiring businesses can be challenging, especially when it comes to integration. A poor strategy can lead to subpar returns for investors and impact worker relations. Bunzl has also historically relied on debt to boost its firepower for deals. Therefore, a significant increase in interest rates could have a substantial negative impact on the business.
Despite these risks and challenges, I’d buy the stock for my portfolio today.
FTSE 100 utility
The other FTSE 100 company that features in my basket of the best shares to buy now is utility provider Pennon Group (LSE: PNN).
The water business operates in an incredibly defensive industry. As such, no matter what happens to the UK economy over the next few years, I think Pennon could produce predictable returns for investors.
Unfortunately, the corporation isn’t without its risks. The water industry is highly regulated, and regulators limit the profit companies like Pennon can generate. This could constrict the firm’s growth in the long term. The business also has a lot of borrowing. So, rising interest rates could also become a headache.
I think it’s worth taking these challenges into account when considering the business. But I’m comfortable with the risks Pennon faces. That’s why I’d buy the FTSE 100 stock for my portfolio today.
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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Pennon 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.