The 5 April deadline for this year’s Stocks and Shares ISA contribution limit is fast approaching.
Two stocks I’m looking to buy as soon as I can are Ibstock (LSE: IBST) and Bunzl (LSE: BNZL).
Here’s why I’m a fan of both stocks!
Bricks galore
Leading manufacturer of bricks and concrete products, Ibstock is a firm I reckon could be set for great long-term growth.
The shares are down 9% over a 12-month period from 164p at this time last year, to current levels of 149p.
I’m not surprised to see the shares have pulled back recently. Full-year results in January confirmed sales had slumped. I reckon this is directly linked to inflationary pressures, a weaker house building market, and general economic woes.
This is the biggest ongoing risk for me, as pressure on sales as well as higher costs could continue to dent performance and returns moving forward.
As I’m a long-term investor, I’m looking forward, and view Ibstock as a great recovery play. There are two main reasons for this.
Firstly, after economic turbulence, there is often a boom in infrastructure building to help stimulate the economy. Next, and linked to the first point, demand for homes is outstripping supply in the UK by some distance.
To fill this gap, many thousands of homes are going to be needed to be built, which means the need for lots of new bricks. Both aspects could help push Ibstock’s shares, performance, and returns up.
Ibstock shares look decent value for money on a forward price-to-earnings ratio of 14 for 2024. It gets cheaper in 2025, on a ratio of 11. Plus, a dividend yield of 4% is attractive.
However, it’s worth noting that forecasts don’t always come to fruition, and dividends aren’t guaranteed.
Bunzl
Business support and distribution giant Bunzl isn’t the most exciting business. However, I reckon it’s a solid, reliable stock that should help boost my portfolio.
The shares are up 5% over a 12-month period from 2,924p at this time last year, to current levels of 3,097p.
There’s lots to like about Bunzl, in my view. Some of these bullish traits include defensive ability, linked to its wide presence in food and healthcare markets.
Next, it has a wide profile and reach, in approximately 33 territories at present. Furthermore, its record of performance and returns is enviable. However, I do understand the past is not a guarantee of the future.
From a bearish view, continued economic issues including higher costs, and shipping issues linked to geopolitical tensions, could hurt the business. I view this as a short to medium-term risk.
The other issue is the firm’s propensity for acquisitions. Savvy acquisitions have helped the firm grow. However, one bad one could hurt its balance sheet, returns, and shares. This is because disposals aren’t usually cheap or easy.
To conclude, Bunzl shares offer a dividend yield close to 2%. If the business keeps growing, this could grow too.
