These FTSE 100 growth shares look like bargains at current prices! Here’s why I plan to buy them for my Stocks and Shares ISA at the next opportunity.
Bunzl
Support services business Bunzl (LSE:BNZL) isn’t renowned for spectacular earnings growth. But it is famed for being able to grow earnings almost every year regardless of economic conditions. It’s why I already hold the company in my ISA.
The Footsie firm sells a broad range of essential products across multiple industries, including defensive sectors like healthcare and food retail. It also sells its products across the globe, which in turn protects group earnings from turbulence in one or two regions.
Bunzl’s profits upgrade this month illustrated its robustness even in tough times. It predicted that adjusted operating profit for this year would be “moderately higher than in 2022 at constant exchange rates.”
This upward revision — which wasn’t the first from the company in recent months — is also thanks to ongoing margin improvement. The record operating profit margin of 7.4% recorded last year is expected to be even higher in 2023.
Earnings could come under pressure if costs spike again. But on balance I expect the bottom line to continue marching higher, helped by its ambitious (and highly successful) acquisition strategy. It has made 17 more bolt-on buys during this year alone. But of course, an acquisition strategy also comes with risks
One final thing: Hargreaves Lansdown notes that Bunzl currently trades on a forward price-to-earnings (P/E) ratio of 16.8 times, below the 10-year average of 18.3 times.
Halma
I think safety equipment manufacturer Halma (LSE:HLMA) is another ‘safe as houses’ FTSE 100 company. I hope to buy it for my Stocks and Shares ISA in 2024.
A growing global focus on health and safety means that sales here continue to grow even despite macroeconomic headwinds. It delivered fresh record revenues during the six months to September and at £950.5m, they were up 9%. Organic sales at constant currencies were up 5% year on year.
Halma is essentially a holding company for almost 50 business in the safety, environmental and healthcare sectors. Like Bunzl, the business looks to acquisitions to drive long-term growth, and it has a similarly impressive track record on this front.
The company has plenty of financial firepower to continue its M&A strategy too. Cash conversion of 96% for the first half sailed past its target of 90%. Acquisitions are always risky, but the firm seems to have a knack of making bolt-on buys work.
Halma has delivered an impressive 20 straight years of record profits. And its focus on defensive and steadily growing sectors suggests that this trend should continue.
Today Halma trades on a forward price-to-earnings growth (PEG) ratio of 0.2. Any reading below 1 indicates that a stock is undervalued. This reinforces my opinion that the company is one of the FTSE 100’s best growth stocks to buy for 2024.
