The FTSE 100 index is home to several high-quality shares. Today, I’m looking at two potential options I could pick for my Stocks and Shares ISA. I’m particularly looking at companies that can demonstrate both quality and growth.
I’d describe a quality company as one that consistently provides a high return on capital employed (ROCE). This is a measure of how effectively a company turns its capital into profits. Popular investor Terry Smith frequently highlights this and says “it is the most important financial measure of what a company is delivering”.
I also want my quality shares to have a competitive advantage. This attribute is what renowned investor Warren Buffett has frequently described as an ‘economic moat’.