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This FTSE 100 growth stock could keep growing profits even as COVID-19 spreads

It’s another day of carnage on financial markets. Rising infection rates, and increasingly-restrictive measures to contain the coronavirus outbreak, are giving investors the heebie jeebies. To sour the mood still further, FTSE 100 giants Associated British Foods and Flutter Entertainment became the latest blue-chips to warn on profits on Monday.

It’s a theme that markets are becoming accustomed to as the coronavirus advances through the global population. EY Club says that 90% of profit warnings from UK plc (from February 26 to March 9) directly cited the impact of the pandemic. The economic forecasters told Bloomberg that they expected the number of warnings to rise “significantly” should the virus keep spreading too.

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A rapid acceleration in the number of reported cases in recent days doesn’t bode well. Data from John Hopkins University today shows that there are now more than 87,000 confirmed infections outside China. This outstrips the reported 80,860 cases inside that country.

Defensive darling

So it’s no surprise that the Footsie has plunged to fresh multi-year lows in start-of-week trade. Having fallen below 5,000 points it’s now at its lowest since the onset of the 2008/09 financial crisis.

There’s one company that’s performed better than most in recent hours, however.  Reckitt Benckiser Group (LSE: RB) hasn’t gone off on a charge but, in the current climate at least. even modest gains are enough to set chins wagging. The household goods giant was last 0.2% higher from last week’s close.

It hasn’t all been good news for the Footsie firm though. Rampant share market selling saw it close at £51.50 per share on Friday, the lowest level for five+ years. Recent weakness leaves it dealing on a forward price-to-earnings (P/E) ratio of 18.4 times, a long way below its historical average well north of 20 times. But I reckon this presents a decent buying opportunity.

Keeping the world clean and healthy

It’s possible that the penny has dropped and the market has realised Reckitt Benckiser’s brilliant defensive qualities. It’s highly unlikely — at least in this Fool’s opinion — that the company will see profits fall off a cliff as many British blue-chips will as the COVID-19 crisis bites.

I recently touched on this theme when talking about PZ Cussons. It’s not just that Reckitt Benckiser’s range of essential household products carry enormous brand power. It’s that demand for its goods, like that for Cussons with its soaps and other personal hygiene products, is likely to get steadily stronger as public fear escalates.

Reckitt Benckiser’s Dettol and Lysol ranges of disinfectant products will be particularly popular at the present time. With fears over coronavirus and seasonal flu spiking, the FTSE 100 company is likely to see its Mucinix and Strepsils throat and chest medications flying off the shelves too, along with its Nurofen painkiller pills.

In an era when profit warnings are becoming the norm, Reckitt Benckiser could well provide some welcome relief to investors. And in light of recent price weakness I reckon it’s one of the best dip buys out there.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of Paddy Power Betfair and PZ Cussons. The Motley Fool UK has recommended Associated British Foods. 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.