2 FTSE 100 stocks I’d buy and hold!

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After what has been a difficult year, I’m on the lookout for FTSE 100 stocks that I can add to my portfolio and hold for the long run. The index has shown its resilience this year as its price has barely nudged. And when compared to the S&P 500, which is down over 10% in 2022, the top 100 UK companies by market capitalisation have shown their worth.

After analysing the index, here are two I have my eye on today.

Unilever

My first pick is consumer goods company Unilever (LSE: ULVR). The business owns over 400 household brands, including names such as Dove, Marmite, and Ben & Jerry’s. So far this year, the Unilever share price is down just over 1%.

My main attraction to the stock is that through buying it I’m adding a strong collection of brands to my portfolio. A third of the world uses its products on a day-to-day basis, highlighting their must-have status and therefore, to some extent, Unilever’s pricing power.

For the first half of the year, revenue grew 8.1% for the business. Yet despite this rise, volume fell by nearly 2%.

This was possibly due to the fact Unilever increased its prices by 9.8% for the period amid rising inflation. With growth being “driven by strong pricing to mitigate input cost inflation,” this shows the firm is capable of tackling surging costs.

On top of this, it’s also made headway in its €3bn two-year buyback scheme, with the aim of launching the second tranche of this in the third quarter.

What does concern me is its debt, and more specifically, rising interest rates on this debt. With the interest rate on average net debt rising from 1.4% last year to 1.9% this half, an already substantial pile has now become more difficult for Unilever to eradicate.

However, I’d still buy Unilever shares today. Its strong brand recognition allows it to fight back against pressures such as inflation. And with moves like buybacks, I’d buy today and hold for the long term.

BAE Systems

My second choice is the arms and security business BAE Systems (LSE: BA). In a year when many have suffered, the FTSE 100 stock has bucked the trend, rising 44% year to date.

The main catalyst for the rise has been the tragic war in Ukraine. While this war alone will drive business for the firm, more widely it’s sparked defence concerns among European countries. As such, BAE’s products have been in higher demand.

For the first half of the year, the company saw underlying profits grow by 8.2%. It also expects up to 4% growth in sales for 2022.

Within its latest update, CEO Charles Woodburn stated that BAE sees “further opportunities to enhance the medium- and long-term outlook as our customers commit to increased defence spending to address the elevated threat environment.”

Like Unilever, BAE is running a buyback programme of up to £1.5bn. With it also increasing interim dividends, these are positive signs for me.

The business may face supply chain pressures in the months ahead and with inflation rising this will more than likely push up the cost of materials.

However, with a strong long-term outlook, I’d happily buy today.

The post 2 FTSE 100 stocks I’d buy and hold! appeared first on The Motley Fool UK.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Unilever. 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.