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These 2 FTSE 100 growth stocks I like are climbing while markets crash

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Everywhere you look, FTSE 100 stocks are crashing. Travel operator TUI AG is down 40% over the last month. Cruise operator Carnival is down 30%. Overall, the FTSE 100 is down around 15%. Yet not every company is having a rough time of it. 

Two of the best performers of recent years are defying the downturn and have continued to grow over the last month. Now could be a good time to check out the Hikma Pharmaceuticals (LSE: HIK) and Rentokil Initial (LSE: RTO) share prices, which are staying afloat, as almost every other company sinks along with the market.

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Pharmaceutical stocks tend to hold their own when stock markets are falling, because people continue to fall ill in a recession, often more than before. 

Hikma Pharmaceuticals

This is particularly true now, as markets fall due to the coronavirus global health scare. Hikma stock is up around 5% over the last week, at time of writing. Over two years, it’s up 124%.

Hikma was given a timely lift by a positive set of preliminaries last week, which showed group core revenue up 6%, with group operating profit surging 33% to $493m. It also strengthened its balance sheet by trimming net debt to $242m, while raising his full-year dividend more than 15% to 44 cents per share.

Many investors overlook Hikma as they target pharma big guns AstraZeneca and GlaxoSmithKline. But this £4.72bn stock has huge growth potential, launching 108 new products across all its global markets last year, and signing 18 licensing agreements for the US and MENA. Its flowing pipeline should help drive future revenues.

Hikma shares should also benefit from its recent blockbuster agreement with Glenmark Pharmaceuticals. Some pharmaceutical stocks have soared on speculation about developing new coronavirus treatments, leaving them overbought.

But that isn’t the driver here. Hikma is just a very good company on a roll. Yet it trades at a modest valuation of 14.5 times forward earnings, while its 1.8% yield is covered 3.7 times by earnings, giving plenty of scope for growth. I’d buy it for the long-term.

Rentokil Initial

Rentokil Initial is also up around 5% over the past week, and a bumper 100% over two years, during which time the FTSE 100 as a whole actually fell 7.5%.

The £9.59bn group is a direct beneficiary of current worries because, along with its renowned pest control services, it also supplies hand washing and hand sanitising services. Again though, this is far from a pure coronavirus play. Last week, the Rentokil share price flew as it posted a 10% increase in adjusted pre-tax profits to £341m, with organic revenue growth of 4% — its highest level in 15 years.

This is a global business, and is performing strongly in its Pacific business region, as countries urbanise and pest control becomes more important, as well as in the UK and Europe.

The big concern is that, after recent share price success, Rentokil stock looks pricey. It trades at 31.8 times forecast earnings, while the yield is relatively low at 1.4%, despite progressive management that recently hiked payouts by 15.2%.

I’d prefer a more reasonable valuation, but this stock is in demand right now.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Hikma Pharmaceuticals. 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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