1 FTSE 100 and 1 FTSE 250 stock I’d buy for my investment portfolio

Screen of price moves in the FTSE 100

If there is anything the pandemic has taught me, it is that safe stocks can be good growth stocks too. They might not show the kind of runaway growth that some cyclical stocks or those in rising industries might, but they can rise consistently over time. And the best part is that they do not lost a whole lot of value, at least not for long, when the stock markets are uncertain. 

Ferguson has seen an impressive share price rise

One of these is the provider of plumbing and heating products to professionals, Ferguson (LSE: FERG). The FTSE 100 company’s share price is up more than 40% over the past year. And in the last five years, it has actually more than doubled in value. 

Going by its latest results, it appears that there could be even better days in store for it. The company’s revenue is up by 14% for the year ending 31 July, compared to the year before. And its earnings per share (EPS) are up by a whole 58%. Its market is North America, predominantly the US. Since prospects for the economy are positive, I reckon that it can continue to make gains this year as well. 

Risk to the FTSE 100 stock

The only risk to it is inflation, which it says could impact its margins. While it is still believed that price rises are largely temporary, I do not think we should discount the impact they can have even in the short term. For proof, we just need to look at how gas prices have impacted the UK’s energy companies. So it is a red flag well worth watching out for. 

Besides this, I think there is a lot to like about the stock. It is a long-term buy for me. 

Pennon combines capital gains and dividends

Another stock I like is the FTSE 250 utility Pennon Group (LSE: PNN), which provides water and wastewater management to parts of England. Its growth is not quite like that of Ferguson. Its share price has risen some 13% in the past year and by 32% in the past five years. This is not a whole lot, but the company does have dividends to its credit. Its average dividend yield for the last five years is 6%. A dividend cut, however, drastically reduced the number. 

Its trading update, released earlier today, makes me optimistic about its future dividends, however. It reports an increase in revenue because of an increase in population in the area it services and also because of the return of business demand. 

Would I buy the FTSE 250 stock?

However, like Ferguson, it too points out to concerns around inflation. Though it expects these cost increases to be outweighed by a rise in revenue, I am waiting for more details on this when it releases its full financial results in November. 

On the whole, though, I think it is a good buy for me. 

The post 1 FTSE 100 and 1 FTSE 250 stock I’d buy for my investment portfolio appeared first on The Motley Fool UK.

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Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Pennon Group. 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.