As I write this, the US election result is hanging in the balance, and the same can be said of FTSE 100 stocks. The index is slightly down, as investors wait to see whether Donald Trump or Joe Biden wins the presidency.
The uncertainty could drag on for weeks, and may have to be settled in the US Supreme Court. Markets hate uncertainty, so this could hit FTSE 100 stocks, especially those with outsize exposure to the US. If share prices do fall sharply, I’d consider snapping up these two top dividend and growth companies.
Equipment rental company Ashtead Group (LSE: AHT) earns around 90% of its revenues through US subsidiary Sunbelt, and has benefited from the country’s lengthy bull run. Its stock has soared by 2,338% in that time, making it possibly the most rewarding FTSE 100 stocks of the decade.
If stock markets crash, buy shares
The Ashtead share price plunged during the first Covid-19 lockdown but has more than doubled since March. That’s why we at the Motley Fool urge investors to buy top companies in a stock market crash. You can make outsize profits when the initial panic passes.
While FTSE 100 stocks have held steady this morning, Ashtead is down nearly 3%, which may reflect current US uncertainties. I’ll be watching its share price like a hawk, because if the electoral troubles intensify, it could fall further.
Frankly, I’d buy Ashtead any time, given its healthy past performance and strong growth prospects. However, following recent strong growth it’s looked a tad expensive, trading at 17.33 times earnings. If US share prices crash and it gets cheaper, I’d fill my boots.
My other FTSE 100 stock with hefty US exposure is plumbing and heating products distributor Ferguson (LSE: FERG), which also generates more than 90% of its revenues from across the pond. Ferguson has also done brilliantly over the last 10 years, rising 350%, with dividends on top. Like Ashtead, it has doubled since March.
I’d buy both these FTSE 100 stocks
The US stock market has easily outperformed the UK in recent years and, on the day before the election, stood at a two-year high. Every UK investor should have some exposure to the US, and it’s great that one can do this by investing in top FTSE 100 dividend and growth stocks like these two.
Like Ashtead, Ferguson is also relatively expensive today, trading at 20.98 times earnings. It has more than justified that valuation, but I’d still rather buy it at a reduced price, should we get a US stock market crash.
As far as these two companies are concerned, I don’t think it matters whether we get President Trump or President Biden. Both FTSE 100 stocks have excellent track records and should thrive, whoever’s in The White House. However, short-term political wrangling may present an opportunity to gain exposure at a reduced price. So that’s another reason to keep eyes glued to the US electoral results.
