Buying any FTSE 100 stock right now might seem like a risky prospect. Indeed, the outlook for the global economy is highly uncertain, and the coronavirus crisis is nowhere near its end.
However, some firms have performed better than others in the crisis. One FTSE 100 company in particular stands out for its resilience in uncertain times.
FTSE 100 market leader
Gathering and analysing credit card and other financial data from consumers is hardly an exciting business. But, for FTSE 100 data champion Experian (LSE: EXPN), it is a highly profitable one.
Experian is one of the largest financial data businesses in the world. This gives the company a tremendous competitive advantage. In the data business, size is everything. The more data you have, the better your competitive advantage over the rest of the industry.
It’s tough for smaller competitors to gather a lot of data very quickly. As a result, big established companies tend to dominate the market. This suggests the FTSE 100 champion should continue to dominate for many years.
And while the outlook for the global economy is highly uncertain at present, Experian’s subscription-based business model should help insulate the company against economic uncertainty.
What’s more, security is paramount. Experian claims to have some of the best cybersecurity protections in the world, and that’s vital to ensure the company’s success.
As the FTSE 100 group has capitalised on its market position over the past decade, Experian has produced attractive returns for shareholders. The stock has delivered a total performance of 17% per annum for the past decade. At that rate of return, every £1,000 invested in the company a decade ago would be worth £5,400 today.
Dividend championÂ
There’s no guarantee the stock will continue to earn these sort of returns going forward. Nonetheless, Experian’s competitive advantages suggest that the business may be able to produce more market-beating returns as the FTSE 100 company builds its position in the data analysis market to grow profits.
As well as producing steady earnings growth over the past 10 years, Experian has established itself as a dividend champion. It has an excellent track record of above-inflation dividend increases.
While the stock’s current dividend yield of 1.3% may not appear particularly attractive compared to the rest of the market, it is covered twice by earnings per share. So, it looks quite safe for the time being.
As such, it may be worth considering adding this FTSE 100 growth dividend champion to your portfolio today. Experian is a global leader in its sector. The company’s substantial competitive advantages should help it stay in this position for many years to come.
If the past 10 years is anything to go by, this could translate into substantial returns for shareholders as the group expands into new markets and builds on its dominant market position.