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These 2 FTSE 100 shares are bucking the 2020 stock market crash. Here’s what I’d do now

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The FTSE 100 is still down 15% in the 2020 stock market crash. But some robust stocks have held up, and some are even in big profit territory this year. The first stock I’m looking at today is so far flat in 2020.

HomeServe (LSE: HSV) provides emergency home electrical and plumbing repairs. And we’d expect those services to be in big demand when people are stuck at home more than usual, right? First-half results released Tuesday say yes. Well, statutory figures were down but, on an adjusted basis, things look bright.

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Adjusted EBITDA grew by 18%, with pre-tax profit up 16%. With earnings per share up 9%, the company has lifted its interim dividend by 7% to 6.2p per share. The only real downside for me is that debt has grown 30% to £586m. But the company says that’s partly down to the impact of previous merger and acquisition activity.

Acquisitions and debt

HomeServe puts its leverage at 2.0x, which is at the top end if its target range of 1.0x to 2.0x. The firm still has around £480m headroom from total debt facilities of £1,010m. So, unlike many struggling during the stock market crash, HomeServe doesn’t seem to have any immediate liquidity problems.

European membership numbers are holding steady, though that alone would not get me too excited. But the company is enjoying strong growth in North American memberships, and I see great opportunities there.

As part of its ‘buy-and-build’ strategy, HomeServe has made nine new acquisitions across North America, France and Spain. And that’s how future growth is likely to continue. Growth through acquisition can be very profitable, and debt funding can gear up the potential profits. I am wary of debt building up, though I’m not seeing any over-stretching at this point. I’m putting HomeServe on my buy list, though not at the top.

Stock market crash winner

Never mind just holding up, my second today is 15% ahead in 2020. That’s a great result any time, but it’s especially welcome in a stock market crash year. I’m talking of financial data company Experian (LSE: EXPN). Whichever way markets are moving, financial data (including credit information) is crucial. And I’m thinking that should provide a very profitable future for firms like this.

Experian also released first-half results Tuesday and, again, I like what I see. Organic revenue is up a modest-but-pleasing 2%. Revenue is picking up too, with a 5% organic gain in the second quarter. Though statutory EPS dropped 9%, the firm recorded a 2% rise in what it considers its benchmark EPS. There’s an interim dividend of 14.5 cents per share, unchanged from last year.

Chief executive Brian Cassin said: “While Covid-19 has significantly impacted the macroeconomic environment, it has also catalysed trends which play to Experian’s strengths.”

Deserved high valuation?

So, we’ve had a health disaster and a stock market crash. But guess what? In such times, businesses rely possibly even more critically on the kind of financial information provided by Experian.

My only reservation about Experian is the stock’s valuation. After such a good run this year, we’re looking at a forecast P/E of around 40 now. And that’s in a year when EPS growth is expected to stall. Still, growth should resume next year. Experian is on my list as a potential buy.

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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Experian and Homeserve. 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.

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