The Motley Fool

I wouldn’t miss out on investing in this US-focused FTSE 100 company

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Silhouette of digger
Image source: Getty Images.

Macro-economic uncertainties can be buzzkill for equity markets. And with Brexit hanging in the air, I don’t think cyclical stocks make for the best investment suggestions at the moment. This is because cyclical companies, as the term suggests, are highly sensitive to turns in the business cycle. As a result, during downturns, their performances (as well as their share prices) can show sharp declines, although they can turn upwards during booms.

But what if there were companies that combined the best of both worlds, showing high growth during booms and staying safe during downturns? They do exist. FTSE 100 construction major CRH (LSE: CRH) is one such, I believe. It managed a pretty good financial performance in 2018 and I believe it’s likely to continue doing so in the future as well. 

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Go (further) west

It might be an Ireland-based company, but its major operations are in the Americas, which account for 66% of the revenues. Europe accounts for most of the remaining business for the firm. I’ve spoken before about the merit of geographical diversification, for instance, in the case of British American Tobacco, and a broad geographic spread is a good hedge against macro risks. So, with the US economy on an upswing, CRH did well financially in 2018. And in so far as its fortunes are tied to economic growth, continued strength in the US economy should continue to bode well for the company.

Far from risk-averse

As good as the risk-management strategy of an intercontinental presence might be, I wouldn’t see this company as risk-averse for even a minute. Its growth is partly driven by a very fast pace of  acquisitions, with 46 deals being completed in 2018 alone. The largest of these was the US-based cement company, Ashgrove. The others are what the firm refers to as ‘bolt-ons’, that is, companies that fill gaps in its existing business, and bolt-on buys are expected to continue. As the annual report says, this is an integral part of CRH’s acquisition model generating above average returns.”

Responsibly profligate

Despite the acquisitions, the company’s debt is under control at 2.1x earnings before interest, taxation, depreciation and amortisation (EBITDA). While absolute debt levels have risen in the last year, healthy growth in EBITDA of 7%, has helped in keeping the ratio manageable. And of course, the company isn’t only buying. I also like the fact that it has balanced acquisitions with disposals to generate more cash.

And it’s still cheap!

Despite all the positives in its favour, CRH is far from expensive. Its trailing price-to-earnings ratio is a very low 5.6x. While the share price has recovered significantly from its December slump, it’s still lower than its one-year average. There’s likely to be some more steam in this stock going forward and I believe it’s a clear buy.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story.

In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

Manika Premsingh 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.