2 FTSE 100 stocks I’d buy and hold for the next decade

| December 22, 2021

The FTSE 100 index has come a long way since the 2020 market crash. Thanks to a few hidden gem stocks, the FTSE 100 has managed to climb around 12% since the start of the year. I’ve already explored some of my top picks from the index. But what about the best businesses to invest in over the next decade? Let’s explore.

High Performing FTSE 100 Stock

Croda International (LSE:CRDA) is a stock that is high not only in price but also in performance. The specialty chemicals firm has been on a bullish run since the 2020 market crash. And in 2021 alone, this FTSE 100 stock has risen by a whopping 60%.

Since I am seeking company stocks that I can buy and hold for the long run, I am looking for qualities that show sustainable growth. One such metric is the Return on Capital Employed (ROCE). The ROCE of this FTSE 100 stock is roughly 13%. Although this is not an excellent percentage compared to the industry average, the consistent increase in revenue and assets makes it attractive, in my mind. Even more so, given management’s acquisitive growth strategy.

The 76% increase in net current assets represents the successful acquisitions of the specialty chemical company. In addition to it, the rise in revenue suggests that the purchase of Iberchem and Avanti has so far proven successful. But acquisitions can lead to future problems. All it takes is one bad deal to potentially derail the group’s financial standing as well as growth prospects.

Having said that, management appears to be prudent in its capital allocation, placing a lot of emphasis on reinvestment into the business. That’s generally a good sign in my experience. Assuming the company can continue to deliver high performance, I believe this could be one of the best FTSE 100 stocks to buy and hold in my portfolio for the next 10+ years.

The first-ever five star SDG rated FTSE 100 stock

Since the boom in online sales, Smurfit Kappa (LSE:SKG) has become a leading global paper packaging services provider. On top of this surge in online sales, recycled paper is a major part of its production process, making it an excellent eco-friendly company. As a result, this FTSE 100 stock becomes an even more attractive investment.

Smurfit Kappa products are 100% recyclable and produced sustainably. Along with this, the company also supports the United Nation’s Sustainable Development Goals (SDG). It provides a wide range of high-quality paper-based packaging solutions for enterprises of all sizes. Furthermore, their products also contribute towards improving the environmental footprint of its customers.

Irrespective of the contribution towards a greener environment, Smurfit Kappa needs to invest more in technology and R&D. It’s far from the only player in this space. And if a competitor can create better products while simultaneously reducing the environmental impact, the company could lose its precious competitive edge. At least, that’s what I think.

At a market cap of £10bn, this FTSE 100 stock is currently trading at around 3,890p. The appreciation trend of the shares picked up the pace during the pandemic. Consequently, it peaked at 4,237p in August. That places its year-to-date performance at around 15%.

Final Words

Major sectoral changes ultimately lead to better-performing companies. With the outlook of most industries improving, these two FTSE 100 stocks demonstrate positive and sustainable growth, in my opinion. That’s why I’m considering both for my portfolio.

The Green Industrial Revolution is here

UK wind power generation has surged more than 700% in the last 10 years... and it's about to get 4x bigger!

The government's Green Industrial Revolution will see every home in the country powered by wind turbines in the next decade.

This UK income stock is leading the charge... and is rewarding its shareholders with dividends that have grown 30% each year for the last 5 years.

With operating profit margins above 80%, our analysts believe this could be one of the greatest income opportunities today.

So don't wait any longer. Get your report on this Top UK Income Stock while it's still free!

Saima Naveed does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned. Views expressed on the companies, assets and strategies mentioned in this article are those of the writer and, therefore, may differ from the opinions of analysts in The Money Cog Premium services.

Logo of Telegram invitation

Join the Discussion on Telegram