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2 FTSE 100 shares I’d buy today

In well-used investing parlance, Worldpay Group (LSE: WPG) has been ‘in play’ after Vantiv Inc made a preliminary approach on 4 July to acquire the entire issued, and to be issued, share capital of Worldpay.”

In or out?

The potential deal was agreed in principle the next day and has been referred to ever since as a potential merger between the two firms. Things became even more interesting this morning with an announcement  extending the deadline to 5.00pm on 11 August for Vantiv to firm up its offer or to walk away.

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Whether the deal goes through or not, I think Wordplay is an attractive and growing firm, made all the more appealing by the interest shown by Vantiv. So, I would be inclined to buy some of the firm’s shares after the deadline has passed, whatever the outcome and after any share price volatility has settled.

Growing earnings

The company operates payments processing technology and solutions for merchant customers enabling them to accept many payment types “across multiple channels, anywhere in the world.” It’s a good business and the firm has achieved chunky double-digit advances in earnings per share over the last couple of years. Looking forward, City analysts following the firm expect earnings to advance around 6% during 2017 and 20% in 2018.

The forward price-to-earnings (P/E) ratio is a little challenging, running at just over 24 for 2018 and since Vantiv’s approach, but there is a growing dividend yield on offer and plenty of potential. If Vantiv does decide to ‘leave it’, we may even see a cheaper entry price very shortly.

Cyclical and growing

Meanwhile, half-year results from Intercontinental Hotels Group (LSE: IHG) demonstrate that the firm continues to charge forward despite any fears we may have about the inherent cyclicality of such a business. Highlights include underlying figures for revenue elevating 4% and adjusted earnings per share shooting the lights out with a 27% uplift. The directors crowned these achievements by pushing up the interim dividend by 10%.

Intercontinental is more than just a cyclical firm, it is also a growing firm. Chief executive Keith Barr explains that a well-established growth strategy led to the milestone of the firm providing one million open or pipeline rooms during the period. But the directors are keeping the pedal to the floor, announcing in June a “new, midscale brand to address a $20bn underserved segment in the US.” Mr Barr reckons this initiative will “become another brand of scale for IHG that will deliver superior returns.”

Why I’d hop on

Intercontinental Hotels has demonstrated such steady operational and share price momentum since the financial crisis last decade that I’d be happy to hop onto the trend, even now. City analysts following the firm estimate earnings will rise around 14% during 2017 and by 9% in 2018. Meanwhile, the forward P/E rating for 2018 sits a little over 21. I’d be the first to admit that the rating seems rich, which is why I’d remain vigilant once aboard. However, I’ve learnt that a high rating in itself is no good reason to avoid an investment opportunity if the fundamentals of the underlying business stack up.

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Kevin Godbold has no position in any shares mentioned. The Motley Fool UK has recommended Worldpay. 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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