Even as the MSCI World Index lost around 13% of its value in 2022, the FTSE 100 delivered a positive return for the year.
That’s particularly impressive given a year of soaring inflation, rising interest rates, and the Russia-Ukraine war.
It also tells me the index is home to some high-quality companies that may be worth my investment.
With that in mind, here’s a look at two FTSE 100 shares I’d buy in a heartbeat if I had the cash to spare.
An outstanding 2022
Shell (LSE:SHEL) shares climbed 33% in 2022. The impressive share price performance reflected a strong year for the company, whose dividend yield currently stands at around 3.9%.
The FTSE 100 oil and gas supermajor saw revenues rocket 46% last year to a whopping $381bn.
More impressive to me is that performance was driven by growth across all core business lines with the exception of the relatively small upstream segment.
What I particularly like about Shell is that its strong financials enable it to fund significant organic investment. After all, strategic acquisitions will continue to be a key driver of growth in my view.
However, one of my concerns is the potential for Shell to end up in the ethical waste bin. After all, one only has to look at the fate suffered by tobacco companies to know the damage this can cause to valuations.
Nevertheless, I’m confident that Shell’s ambitious commitment to net zero largely offsets this risk. The company’s renewables and energy solutions segment continues to grow. In fact, it now makes up almost 14% of group revenues.
With that in mind, I think the future is bright for Shell despite my concerns. As such, I wouldn’t be surprised if we see sustained share price growth in the long run.
For this reason, if I had some spare cash, I’d be confident buying Shell shares today provided I held them for the long term.
Potential for future growth
Unlike Shell, Reckitt Benckiser‘s share price suffered lacklustre growth in 2022. The FTSE 100 consumer goods company’s shares fell by around 8%.
Despite a poor share price performance last year, Reckitt recently reported full-year like-for-like sales growth of 7.6% with net revenue of £14.5bn. These results were driven by higher prices, as volumes actually fell by 2.2%.
Despite the inconvenience for consumers, this represents a smart move by Reckitt in my view. Amid a challenging business environment, price hikes had to be the aim of the game to ensure a sustained solid performance.
However, challenges still remain. Not least the tough inflationary environment that continues to cause problems.
The FTSE 100 company has also warned it will be investing more heavily. This means cost management will become all the more important.
That said, taking a long-term view, I’m confident Reckitt remains in a favourable position.
Above all, I think the company’s growing online presence represents a key area for future growth. Especially considering e-commerce now makes up roughly 13% of total revenue.
All things considered, I’d buy Reckitt shares in a heartbeat if I had the cash to spare.
