2 FTSE 100 shares to load up on for the next bull market

It’s time to hunt for high-quality growth stocks, says Paul Summers. He’s picked out two FTSE 100 (INDEXFTSE:UKX) shares to buy and hold.

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With inflation remaining stubbornly high and investor sentiment depressingly low, it’s tempting to believe we’ll never see another bull market. But, of course, we almost certainly will. And that’s why I think it’s vital to go shopping for quality FTSE 100 shares when no one else is.

Slowing market

Despite recovering from the fallout of the disastrous mini-budget, shares in property portal Rightmove (LSE: RMV) are still down roughly 9% on this time last year. They’re also significantly down on the near-800p level hit on the last day of 2021.

It’s not hard to see why. As mortgage rates have climbed, the housing market has slowed considerably. At times like this, anything related to the sector is unlikely to get by unscathed.

No one knows exactly when things will pick up, but we can be pretty sure they will. This may come from an eventual reversal in rates, or from people simply adapting to the ‘new normal’. As many baby boomers will attest, current interest rates are still very reasonable compared to the past.

And this is partly why I think investors should buy Rightmove stock now

Quality FTSE 100 share

True, no stock is ever a safe bet and Rightmove could sink lower. But unless someone can show me a quicker and more convenient way for people to look for a new home, I doubt trading will fall off a cliff.

I can’t see its crown being dislodged anytime soon either. The brand is so deeply ingrained in public consciousness, it will take an awful lot of up-front money and time to mount even a barely adequate challenge. To date, no other company has come close.

Rightmove scores brilliantly on various financial metrics as well. Thanks to its online-only business model, margins and returns on capital employed – essentially, what the company gets back for what it puts in – are staggeringly good.

I doubt there are many better-quality growth stocks in the index.

Top growth stock

Another FTSE 100 share I’d buy is the life-saving technology firm Halma (LSE: HLMA). Like Rightmove, its appeal to investors has cooled as growth companies have been shunned in favour of dividend-paying value stocks. Shares are still 30% below the record high reached at the end of 2021.

Now I like the sound of dividends hitting my account as much as anyone. Nevertheless, I’ve (hopefully) got a few decades left in the market. This makes me gravitate more towards those companies capable of delivering capital gains over income.

This is why Halma hits the spot. Its acquisition-focused strategy has allowed it to grow earnings consistently over the years. Its mission to create “a safer, cleaner, healthier future for everyone” also clearly chimes with the status quo and the increase in legislation to protect workers.

Expensive… but worth it

If there’s an issue with this company, it’s the valuation. As great a business as I think Halma is, a price-to-earnings (P/E) ratio of 30 is undoubtedly steep. On the flip side, this is far lower than it once was.

Moreover, Halma’s track record speaks for itself. Margins are consistently well above the FTSE 100 average. The total dividend has also been hiked by 5% or more every year for over four decades!

That’s the sort of stock I want for when the good times return.

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 assessed. Consider taking independent financial advice.

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Halma Plc and Rightmove Plc. 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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