Investing your hard-earned cash after seeing the markets drop over a third of their value may seem like a tough ask. Volatility is still in the air, with the bulls and bears duking it out. Who will come out ahead? No doubt there is uncertainty in the markets, although following a long and successful history of creating shareholder value, there is one FTSE 100 growth stock that has held up well this year. And I believe it looks set to continue its impressive run.
Croda International (LSE: CRDA) creates, makes, and sells specialty chemicals for a diverse range of products,including health and beauty, engine lubricants, plastics, and many more. It is one of the few FTSE 100 stocks still in positive territory for the year to date.
Croda has swiftly adapted to the Covid-19 crisis, adhering to government advice across its international footprint. All 19 of its manufacturing sites remained operational given its critical supplier positioning to several industries including health care, crop care, cleaning, and sanitisers.
Croda’s segments are benefitting from positive tailwinds the company likes to call “megatrends”. Its Life Sciences business is delivering better health and well-being through disease prevention, and better crop management systems to feed growing populations with less environmental impact. The Personal Care business is looking after consumers with growing incomes seeking clean and natural beauty, and more effective solar protection. Meanwhile the Performance Technologies business is all about renewable technologies, for affordable and clean energy, helping customers meet their climate action goals.
It seems the public can’t get enough of FTSE 100 constituent Croda’s creations. Its patented Matrixyl 3000 peptides are one of two key ingredients in a new face cream to be sold at Boots. No7 Advanced Retinol 1.5% Complex Night Concentrate, priced at £34, reportedly has a waitlist of 100,000 people!
Croda has a strong balance sheet, giving it sufficient liquidity to navigate any extended period of uncertainty. It has no material debt maturities due before 2023. At 31 March 2020, it had committed funding in place of £1,076m, undrawn committed facilities of £457m, and £91m in cash.
Croda’s long-term success for investors is nothing short of extraordinary. Over the past 20 years, shares in the FTSE 100 company plus dividends have netted investors a whopping 2,600% return! It has an impressive history of acquisitions and organic growth, with 15 major additions to its portfolio since 2012. It plans to increase its presence in key geographies, expand product offerings, acquire adjacent businesses and technologies, as well as continue scaling to improve existing margins. Coupled with a healthy financial position, I believe Croda looks well placed to continue delivering these exceptional returns for investors.
