I always try to keep a list of the companies I believe are the best stocks to buy now. By having such a list, I can move faster to take advantage of opportunities in the market when they present themselves. Right now, there are two FTSE 100 businesses on my list that I would like to buy as soon as possible.
FTSE 100 growth business
Kingfisher (LSE: KGF) sits near the top of the list of my best shares to buy now. The company, which has fared particularly well in the pandemic, is currently looking to expand.
At the beginning of March, the organisation announced that it is taking its B&Q business to the Middle East. It has signed a franchise agreement with Al-Futtaim Group, which will operate the stores. It is planning to have at least two open by the end of the year.
Meanwhile, the group’s Screwfix brand is also planning to grow. It is looking to open more than 50 stores across the UK and Ireland in 2021, creating 600 new jobs. Kingfisher wants to capitalise on the business’s growth during the pandemic. Screwfix’s annual sales hit a high of £2bn for the first time last year.
I think these initiatives could help the company grow substantially over the next few years. That is the main reason why I would buy the FTSE 100 stock for my portfolio today.
That said, the retail industry is incredibly competitive, which suggests it won’t be plain sailing for Kingfisher as we advance. This is the main challenge the corporation faces. It needs to remain competitive to maintain its market share. If the company fails to invest enough in customer service, customers could leave and go elsewhere.
Best stocks to buy now
The other FTSE 100 company on my list is the housebuilder Barratt Developments (LSE: BDEV).
The UK housing market is structurally undersupplied, which is one reason why home prices have risen almost continually for the past few decades.
I think the market will remain undersupplied for the next few years, which should support house prices. Low interest rates should also help underpin the market.
I think these twin tailwinds will help power Barratt’s growth in the years ahead. Of course, the firm’s growth is not guaranteed. A credit crunch could cause a housing market collapse, which would pull the rug out from under the business. Rising costs could also put profit margins under pressure, which would limit the company’s ability to return income to investors.
Still, I’m comfortable with these challenges and risks. That’s why I would buy this FTSE 100 stock from my portfolio today. I think the company has enormous potential over the next few years both as an income and growth stock. City analysts are currently expecting the business to deliver a dividend yield of around 4% for 2021, although this is just a projection at this stage.
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Rupert Hargreaves owns no share mentioned. 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.