2 FTSE 100 stocks I'd buy and hold for 10 years

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With business continuing to swell in the world's developing regions, I am convinced Prudential(LSE: PRU) will prove to be a highly-lucrative earnings selection looking ahead.

Those piling into the insurance leviathan back at the turn of the decade will be licking their lips right now. Prudential's share price has trebled in value since 2010, supported by a record of healthy profits expansion, and the probability of additional bottom-line growth makes the firm a great bet for further hefty share price gains.

The FTSE 100 firm is expected to report earnings growth of 7% in 2017, according to City brokers, and to follow this with an identical rise next year. And current forecasts make the share terrific value for money (Prudential's forward P/E ratio of 13.3 times falls well below the widely-accepted value benchmark of 15 times).

And I am backing earnings expansion to pick up in the years ahead as the company ups the ante in its core growth markets.

(Far) Eastern promise

You see, Prudential saw group operating profit rise 5% during the first six months of 2017, to £2.36bn, with the hot growth markets of Asia again grabbing the glory. New business profit from this territory boomed 18% in the period, to £1.09bn, and I am convinced financial product demand from Asian customers should continue to explode as population numbers and personal affluence levels rapidly grow.

The prospect of electric earnings growth is not the only reason for you to pile in right now either. Indeed, Prudential's brilliant record of profits generation has allowed it to lift dividends at a terrific rate, and the Square Mile unsurprisingly expects this twin trend to continue.

Last year's reward of 43.5p per share is expected to rise to 47.8p in 2017, and again to 51.7p in 2018. Subsequent yields of 2.6% and 2.8% for this year and next should add an extra incentive for investors to pick up some Prudential.

Next big thing?

Smith & Nephew (LSE: SN) is another Footsie business I would buy and cling onto in the years ahead.

Like Prudential, the manufacturer of artificial joints and limbs can look to emerging regions to drive the bottom line as vigorous economic growth drives healthcare investment. Smith & Nephew saw revenues from these exciting new regions move back to double-digit percentage growth during April-June, with sales rising 13% year-on-year.

What's more, the London company's increasing focus in the field of robotics-assisted surgery also provides plenty of revenues opportunity in a fast-growing sector. Indeed, Smith & Nephew witnessed "continued strong demand" for its NAVIO handheld robotics system in the second quarter, it said in its July trading statement, and it launched its new Total Knee Application for the platform in the period.

So the City is expecting the medical ace to bounce back from last year's rare earnings reverse to report profits expansion of 8% and 3% in 2017 and 2018 respectively.

And these estimates are expected to put dividends back on an upward slant as well -- 2016's payout of 30.8 US cents per share is expected to rise to 33.2 cents this year and to 35.2 cents in 2018, creating handy yields of 1.8% and 1.9%.

I am convinced Smith & Nephew's leading position in next-generation medical technologies makes it worthy of a hefty forward P/E ratio of 21.2 times.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.


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