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Forget Kier Group, I’d buy these 2 FTSE 100 shares instead

Struggling construction company Kier Group continues to spiral downwards. On Monday it was announced the company is to cut 1,200 jobs and sell its non-core businesses, such as waste collection and facilities management. The dividend will also be suspended for the next two years, as part of a review to lower debt and simplify its structure.

Kier is a stock Neil Woodford recommended and had a large position in. This will no doubt have added to his woes, as overall, the stock is down nearly 90% in the last 12 months.

Although Kier’s shares are cheap, the company has a large debt problem and I would rather invest in more promising alternatives.

BAE keeping citizens safe

Escalating political threats, broadening regional conflicts, increased terrorism and the exponential growth of cyber-attacks are a selection of the challenges compelling countries to raise their investments in defence and security.

BAE Systems (LSE: BA) is a trusted brand, and long-standing favourite defence contractor for governments around the world. The UK Ministry of Defence, the US Department of Defense and the Australian government are regular customers. BAE provides defence, aerospace, and security solutions worldwide.

In these turbulent times, with the global threat of war and terrorism, our thoughts inevitably turn to defence and security solutions.

I believe BAE is an undervalued stock with reasonable growth potential. Its advanced defence technology protects people and national security, it specialises in combating financial and cybercrime and keeps critical information and infrastructure secure. I think these are areas worth investing in.

BAE Systems has recently completed acquisition of the Riptide Autonomous Solutions Business as well as partnering with UiPath in the United States to Expedite Machine Learning Adoption across the U.S. Defense and Intelligence Communities.

It has also been recognised by Amazon Web Services as a Premier Consulting Partner for Servicing U.S. Government and Commercial Clouds, furthering the company position as the go-to expert for developing and operating government cloud environments.

BAE has a high level of debt, but this is covered by operating cash flow and interest payments on debt are covered by earnings.

Personally, I think it’s a good solid company for long-term investment.

Ashtead, resilient and rising despite the rumours

Ashtead Group (LSE: AHT), the FTSE 100-listed construction equipment hire firm, is another interesting stock to watch.

Brokers have upgraded their stance on Ashtead as they foresaw forecasts for pre-tax profit of £1.1bn to be underestimated. Actual underlying pre-tax profit rose to £1.11bn .

Concern of a slowdown in the North American market has proven to be much ado about nothing as it continues to experience strong end markets in North America.

The group’s rental revenue increased 18% for the year and underlying pre-tax profit increased 17% and they raised their dividend.

The business is broadening its product offering, geographic reach and end markets, in a bid to increase market share and diversify. 146 locations have been added due to Ashtead’s organic growth strategy supplemented by targeted bolt-on acquisitions.

Historic earnings valuations show Ashtead’s shares to be trading at a significant discount.

Ashtead looks like a great dividend stock for long-term investors and, as the company remains focused on responsible growth, I expect further market share gains to come.

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Neither Kirsteen nor The Motley Fool UK have a 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.