In the past, I’ve found that purchasing FTSE 100 stocks can be a great way to enjoy growth over the long term. With this in mind, two companies from the index look appealing to me. Let’s take a closer look.
Benefiting from higher interest rates
First, Standard Chartered (LSE:STAN) has been benefiting from the continued rise in interest rates. This means that the bank may be able to charge customers more for mortgages and loans.
Inflation also appears to be climbing, and this suggests that central banks around the world could continue their strategies of increasing interest rates. The purpose of this is to get the economy under better control.
For the six months to 30 June, the business reported that its net interest margin grew by 0.06% to 1.35%. This is essentially the difference between how much interest it pays customers who deposit cash, and how much it charges those who are borrowing money.
The firm expects the net interest margin to reach 1.4% for the whole of 2022 and rise to 1.6% in 2023. As a potential investor, it’s possible I could benefit from this trend of rising interest rates during the next couple of years.
However, the firm has reasonable exposure to the Chinese real estate market. Given the vulnerability within that sector, Standard Chartered may take a hit if the market continues its decline.
Despite this, pre-tax profit for the six months to 30 June increased 7% and the business is embarking on a $500m share buyback scheme. It also paid an interim dividend of ¢4 per share.
Shiny profit margins
Next, Endeavour Mining (LSE:EDV) is a company I’m watching closely. The firm – an Africa-based gold miner – recently increased its full-year production guidance to between 1,315,000 and 1,400,000 ounces of gold when it released its interim results.
What I find impressive about this business is that it expects to report all-in sustaining costs of between $880 and $930 for the whole of 2022. Given that the current gold price is $1,727, this efficiency could translate into significant profit.
Furthermore, at the end of June, the company had operating cash flow of $553m. Its cash balance also increased by $141m to $217m.
However, the firm operates in countries that may be politically volatile. Any escalation of tensions could result in conflict, potentially impacting mining operations.
On the flip side, if a recession is on the horizon, investors may flock to gold as a safe-haven investment. This could mean that the value of Endeavour’s produce rises, likely positively affecting company results.
Overall, both of these businesses have posted strong results and may benefit from the broader economic environment in the future. To that end, I’ll add both firms to my portfolio soon.
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Andrew Woods has no position in any of the shares mentioned. The Motley Fool UK has recommended Standard Chartered. 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.