I’m optimistic about the prospects for several FTSE 100 shares right now. And if I wasn’t already fully invested, would research some with the idea of holding for the long term.
For example, I like the look of Ashstead (LSE: AHT), the equipment rental company.
Should you invest £1,000 in Ashtead Group Plc right now?
When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Ashtead Group Plc made the list?
In December 2022, the firm released the half-year results report covering the period to 31 October. And the directors said the business had seen “ongoing momentum in robust end markets”. Indeed, revenue rose by 26% year on year. And adjusted earnings per share shot up by 32%.
A resilient business
The business has shown remarkable resilience over the past few years. And that’s even through the pandemic. Revenue, earnings and cash flow have all been generally trending up. And City analysts expect earnings to rise by single-digit percentages this year and next.
On top of that, predictions are for the shareholder dividend to increase by around 10% each year too. However, the level of yield is nothing to be excited about. With the share price near 5,360p, the forward-looking dividend yield is a mere 1.5% for the trading year to 30 April 2024.
There are undoubted cyclical risks involved when holding this stock. But I reckon there’s also an underlying long-term growth story at play. And I’m tempted to hop on board because the forward-looking earnings multiple looks fair to me at its level near 16.
But I’m also keen on DCC (LSE: DCC), the sales, marketing and support services company. The business is active in the energy, healthcare and technology sectors.
In November last year, the first-half report showed decent progress. Revenue rose by 44% year on year and adjusted earnings were almost 7% higher. But the company also reported vibrant acquisition activity. And net debt increased from around £54m at the start of the period to about £782m by the end of it.
A positive outlook
Looking ahead, the directors expect the year ending 31 March to deliver “profit growth and development”. And that’s despite “the challenging macro environment at present”.
Meanwhile, City analysts expect earnings to grow by around 28% in the current trading year. And by almost 4% in the year to March 2024. But on top of that, they predict mid-single-digit percentage increases in the shareholder dividend each year too.
I like the steady financial progress DCC has made over the past few years. And although there are no guarantees, I’m optimistic the firm can continue its modest acquisitive and organic growth in the years ahead.
However, there are many moving parts in this business. And debt has been on the rise. So, I reckon both those things add some risks for shareholders. But nevertheless, I’m tempted to buy some of the shares to hold for the long term. And I’d aim to collect that stream of rising dividends while waiting to benefit from the steady growth that may hopefully continue.
