Got £2,000 to invest? I’d consider splitting it between the BP share price and this FTSE 100 growth stock

Harvey Jones reckons now could be a good time to buy oil major BP plc (LON: BP) and this overlooked FTSE 100 (INDEXFTSE: UKX) growth winner.

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Gold medal

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Publishing and events organiser Informa (LSE: INF) jumped 2.8% this morning after reporting group underlying revenue growth of 3.9% for the 10 months to 31 October, with trading on track to meet full-year expectations.

Get Carter

Its confident trading update follows a bumpy three months with the stock falling 15% over that time, although anybody following the fortunes of the FTSE 100 will know it is not alone in struggling lately.

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Group CEO Stephen A Carter said that Informa has effectively combined with its £3.8bn acquisition, events organiser UBM, to create brands and platforms for future growth and scale. The merger created a business with a market cap of £8.91bn, making it the world’s largest business-to-business (B2B) events group and bringing economies of scale and cost synergy savings.

Forward march

More than 60% of its revenue is now booked and recurring, giving it “good forward visibility”. This is an international operation with strong positions in the US, Asia and the Middle East and Carter is confident of “delivering a further year of growth in revenue, profit, earnings, dividends and cashflow,” impressive amid the current uncertainty.

The combined Informa Group delivered underlying revenue growth of 3.9% over 10 months, with reported revenue growth up 31.8% including UBM’s contribution. This leaves it on track to meet its underlying revenue growth target of 3.5%+, even with the “uncertainties from US/China trade relations, Middle East political tensions and Brexit negotiations, amongst others”. The group’s relatively small revenue base in mainland Europe shrinks Brexit risks.

Black gold

Informa now trades at a forecast valuation of 15.1 times earnings with a solid yield of 3.1%, covered 2.9 times. Recent steady earnings per share (EPS) growth looks set to continue at a forecast 4% this year and 8% in 2019. This is one of the steadiest FTSE 100 companies I have looked at lately. Others think it is compelling too.

Oil major BP (LSE: BP) has also been bumpy, falling 8% over the last month as investors fret about the impact of the US-China trade war, emerging market weakness and rising interest rates, which could hit growth and demand for oil.

Falling barrels

Brent crude has now dropped below $70 a barrel – barely six weeks after breaking through the $80 barrier on Iranian sanctions fears. A surge in US shale production and higher output from Russia, Saudi Arabia, the UAE, Iraq and Libya, are behind the reversal.

Sentiment changes quickly though and while Saudi and Russia are now considering a production cut in 2019, one Trump misstep with Iran could send price hurtling upwards again.

Cash cow

Either way, BP will survive, just as it survived $27 oil in 2016, while still pumping out its dividends. It generated $6.6bn worth of cash in the third quarter alone, generating an underlying replacement cost profit of $3.8bn, up $1bn on the preceding quarter.

That was its best quarter in more than five years and promised divestments of $5bn-$6bn will be used to pay down net debt, which stood at $39.2bn on 30 September. BP’s forecast yield is a juicy 6% with cover of 1.4, yet it trades at a discounted price of just 11.4 times earnings. Recent weakness looks like a buying opportunity to me. Its stock could even hit 800p.

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harveyj has no position in any of the shares 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.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

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