In times of economic uncertainty and fear of a stock market crash, I always turn to tested FTSE 100 shares. It is not an easy task to pick long-term winners in the market but there are some markers I use to point me in the right direction.
I feel like the vast world of charts and analytic tools weigh me down sometimes. Instead, I tend to rely on basic investing guidelines. Looking at potential future demand in the sector, market share, and core financials help me pick stocks that I’m comfortable holding for the long term. Based on these criteria, here are three FTSE 100 shares I am looking to buy now and hold for a decade.
Banking and insurance
Banks and insurance businesses with a large market share almost always recover well from a recession. They have high customer retention rates compared to most sectors, making them a good bet in the event of a market crash.
Right now, Lloyds Banking Group (LSE: LLOY) and Aviva (LSE: AV) look like good buys for my long-term portfolio. The Lloyds share price has risen 69.5% in the last 12 months. But, it has fallen 2.7% in the last month, offering a good entry point in my opinion.
Being UK’s leading mortgage provider, the company is venturing into property investment under the brand Citra Living, in partnership with FTSE 100 company Barratt Developments. Given the booming housing prices in the UK, I think this is a shrewd move. The company estimates an initial £300m pre-tax profit, which could expand over the next decade.
Lloyd’s shares are currently trading at 44p with a price-to-earnings ratio of 6.7. Given the strong first-half (H1) 2021 financials, I think this FTSE 100 share is largely undervalued at the moment.
Similarly, UK insurer Aviva is a company that is undergoing tremendous changes at the moment. I wrote about its efforts to refine its operations and focus on the UK, Canada, and Irish markets. A mass selloff of foreign holdings has led to a marked increase in shareholder returns.
Aviva has posted solid H1 2021 figures with operating profits up 17% to £725m. Its current dividend yield of 4.9% and significant debt reduction over the last 12 months has set the insurer up for good returns over the next decade. Although it faces stiff competition from the likes of Legal & General, Aviva looks like a steady FTSE 100 share for my long-term growth portfolio.
FTSE 100 staple
Next on my list is commodity trading and mining company Glencore (LSE: GLEN). Mining stocks are on the rise recently, defying current market trends.
The H1 2021 results for the company showed an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortisation) profit of $8.7bn. This is 79% higher than H1 2020. As a result, its share prices are up 38.3% in 2021 and 82% in the last 12 months.
The company also plans to return $2.8bn to shareholders in 2021. This could improve its current 2.5% dividend yield after the 2021 annual payout. Glencore has invested heavily in its copper and cobalt reserves and is now partnered with Tesla’s electric car manufacturing plants. I think the company is well set for steady returns over the next decade, which is why it’s on my list of FTSE 100 shares to buy for the next decade.
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Suraj Radhakrishnan has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking 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.