These 2 FTSE 100 stocks have thrashed the market but are they too expensive now?

These two FTSE 100 stocks have delivered rip-roaring growth in recent years but are they now too expensive for me to buy as a result?

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While many FTSE 100 stocks have struggled lately, these two growth monsters have been busy making investors rich. Mining giant Antofagasta (LSE: ANTO) and plumbing and heating products distributor Ferguson (LSE: FERG) have grown an astonishing 168% and 64% respectively over the past 12 months.

This isn’t just a Covid-19 quirk. Measured over five years they are up 238% and 136% respectively. Both published results today, and both reported a further jump in profits. I think Antofagasta and Ferguson are two of the most exciting stocks on the FTSE 100, but as ever in life there is a catch.

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You can probably guess what it is, too. After such barnstorming growth, these FTSE 100 stocks are looking a little expensive. So would I buy them today?

Both shares are recovery plays

Underlying full-year profits at Chile-focused copper miner Antofagasta jumped 12.3% last year to $5.12bn, on revenue growth of 3.3%. Sales volume fell, but copper and gold prices compensated by rising around 25%. Profits were further boosted by “the weaker Chilean peso, lower input costs and continued tight cost control”, management said. EBITDA margins increased from 49.1% in 2019 to 53.4%.

Antofagasta’s 2020 dividend totalled to 54.7 cents, up 22% on last year, easily beating analyst expectations. The 1.7% forward yield may look low compared to some FTSE 100 mining stocks, but it is covered 2.8 times earnings. Naturally, with all that share price growth, dividends have struggled to keep pace.

As with any metals or minerals commodity producer, Antofagasta relies on a booming economy to support demand. Many investors have been buying in anticipation of a strong post-pandemic recovery. Currently, it trades at 44 times earnings, but with a forward valuation of just 22 times. If the recovery disappoints, Antofagasta’s share price could go into reverse. 

I’m relatively optimistic about the wider recovery, but I think the Antofagasta share price has raced ahead of many FTSE 100 stocks, and I might watch and wait for now.

Ferguson, formerly known as Wolseley, is also benefiting from recovery hopes, particularly in the US, where the company mostly operates. 

These FTSE 100 stocks are flying

The group posted a 12.2% rise in underlying half-year trading profit. Revenue rose 4.2%, despite one fewer trading day. Management put this down to “excellent cost control”It also hailed “good operating cash generation and [a] very strong balance sheet”. Ferguson still has an eye on growth, investing $224m in four first-half acquisitions. However, management dampened expectations by flagging up a “very uncertain” second-half outlook, amid supply chain pressures.

It also warned of “increasing supply chain pressures, transportation costs and the reversal of temporary cost reduction actions” during the first lockdown. So there are potential setbacks here, which could hit the share price hard because it is also expensive, trading at 21.8 times forward earnings.

Ferguson’s forward yield is 1.8%, covered 2.6 times. As with Antofagasta, rapid share price growth makes its dividends look less generous than they really are. This is still a top FTSE 100 income stock. Ferguson also treated shareholders to a $400m buyback, following the sale of Wolseley UK.

I like both FTSE 100 stocks, but marginally favour Ferguson. US President Biden’s $1.9trn stimulus splurge should give it a lift, along with the rest of the US economy. Let’s just hope that recovery arrives soon.

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Harvey Jones 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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