During times of market volatility, it is common for investors to panic and sell shares. I try to practice the principle of scouring UK shares to find quality long-term growth investments. The only relevance market dips have for me is providing buying opportunities at lower prices. I think I’ve found two FTSE 100 companies that I’ll add to my portfolio without delay. Why do I think that they’ll be good additions? Let’s take a closer look.
UK shares: Coca-Cola
Providing that ice-cool hit on a warm day, Coca-Cola is a recognisable drinks brand in every corner of the globe. Listed on the FTSE 100, Coca-Cola HBC (LSE:CCH) is a bottler operating mainly in Europe and Africa. It currently trades at 1,671p, down 26% in the past year.
I see strong growth in its historical results. Between the 2017 and 2021 calendar years, group revenue increased from €6.5bn to €7.1bn, while profit before tax grew from €564m to €734m. As a potential shareholder, I see this growth in both revenue and profit as strong and consistent.
What’s more, earnings per share (EPS) rose from ¢117 to ¢150. By my calculation, this means that this firm has a compound annual EPS growth rate of just over 5%. In addition, the 2021 calendar year operating expenses declined by 1.9%, year on year.
On the other hand, the business recently pulled its guidance for 2022, because of the ongoing situation in Ukraine. It has a production plant in Kyiv and its sales in Russia will likely be affected. While this is a short-term concern, I think it is now factored into the share price and should subside in the near future.
Veterinary pharmaceuticals
Another great UK share is Dechra Pharmaceuticals (LSE:DPH), which specialises in veterinary pharmaceuticals and biotechnology. Operating globally, it has strong historical results like Coca-Cola HBC. It currently trades at 4,109p, up 21% in the past year.
For the years ending June, between 2017 and 2021, revenue nearly doubled to £608m. Also, profits before tax rose from £28.6m to £74m.
In addition, EPS grew from 64.68p to 108.77p, resulting in a compound annual EPS growth rate of nearly 11%. As a potential investor, I’m happy to see this level of sustained growth. It should be noted that past performance is not necessarily indicative of future performance.
The company has stated, however, that it faces strong competition on a number of new products within the EU market.
For the six months to 31 December 2021, the firm lifted its interim dividend to 12p per share, up over 8% year on year. This caused investment bank Liberum to raise its price target from 4,000p to 4,020p.
Overall, both of these UK shares exhibit strong growth over time. Given the recent market sell-off, I think they’re both good additions to my long-term portfolio. I will be buying shares in both companies today.
