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2 top blue-chip stocks to buy now

It’s been just over 10 years since global paper and packaging group Mondi (LSE: MNDI) was first spun-off from diversified mining giant Anglo American, and in the decade that has followed, it has well and truly proven itself to be a successful and flourishing business in its own right.

The FTSE 100 group based in Addlestone, Surrey, is now fully integrated across the packaging and paper value chain – from managing forests and producing pulp, paper and compound plastics, to developing effective and innovative industrial and consumer packaging solutions.

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Industry giant

The company’s products can be found in a variety of applications including hygiene components, stand-up pouches, superstrong cement bags, clever retail boxes and office paper, serving customers across a wide variety of industries across all geographical regions.

Since its demerger from Anglo American in 2007, the business has grown into an industry goliath, with annual revenues well in excess of €6bn. The company has continued to deliver high levels of growth, despite its size, with pre-tax profits more than doubling from €368m to €843m in the last five years alone.

Quality blue chip

Investors have no doubt been impressed with the group’s performance over the years, sending the share price rocketing from lows of 121p in the aftermath of the last recession to all-time highs of 2,130p in the latter part of 2017.

However, I believe the recent share price weakness could signal a buying opportunity for long-term growth-focused investors to buy this quality blue-chip that’s currently trading on a relatively modest earnings multiple of 12.

Hurricane activity

Another blue-chip that has thrived since the financial crisis is international building materials group CRH (LSE: CRH). The Dublin-based firm has enjoyed a pretty good year so far despite the current economic uncertainties, with cumulative sales of €20.7m in the first nine months, representing a 2% increase on the previous year on a like-for-like basis.

The group has benefitted from continued underlying growth in the Americas, despite the adverse impact of severe weather and in particular hurricane activity in the region during 2017. But while momentum remains positive in Europe, market conditions in Asia continue to be highly competitive.

The only way is up

Still, CRH remains well-positioned to benefit from President Trump’s push for increased spending on the US’s creaking infrastructure, and this should continue to be a big driver of growth in the coming years. With full-year results due in a just a few weeks, management expects full-year earnings (before interest, tax, depreciation and amortisation) to be in excess of €3.2bn for 2017, a €70m improvement on the previous year.

The shares have struggled to find direction over the past 12 months or so, and yet to me they look significantly undervalued trading on a forward earnings multiple of 13.8 for the current year to December. I reckon that if those annual results live up to expectations, from hereon in, the recently battered share price should start to rise.

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Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.