Importantly, however, the analyst community didn’t see this coming. The consensus view of the stock five years ago was Hold – and I think there’s a lesson in that for investors.

How it happened — and what comes next?

Five years ago, Rolls-Royce was in deep trouble. It was running out of cash, had huge amounts of debt, and revenues were being crushed by pandemic-related travel restrictions. 

Then everything changed:

• Engine flying hours recovered following the end of Covid-19.
• Defence budgets increased across NATO members.
• Tufan Erginbilgiç’s transformation programme boosted internal efficiency.

As a result, cash flows increased. The firm used these to strengthen its balance sheet, which resulted in lower interest costs, driving cash flows even higher.

A big part of the rising share price, however, isn’t just the fundamental business improvements. It’s how the stock market sees those changes.

The stock has gone from trading at a price-to-sales (P/S) multiple of 0.8 to 5.39. That’s a 10-year high and it’s matched by operating margins that are also at their widest levels in a decade.

Source: Fiscal.ai

The consensus among analysts now is Strong Buy. But at high multiples and with unusually wide margins, it’s not about recovery any more – investors are looking to break into uncharted territory.

The next Rolls-Royce?

I think Bunzl (LSE:BNZL) – a FTSE 100 distributor of consumables for businesses – looks a lot like the Rolls-Royce of five years ago. And it has an extra growth engine of its own.

There are a few key similarities:

• Bunzl is coming through a difficult part of the cycle, with deflation and destocking weighing on growth.
• Operational errors in its shift to own-branded products have created challenges in North America.
• The stock is trading at a price-to-earnings (P/E) multiple well below its 10-year average.

Investors didn’t really see the Rolls-Royce recovery coming. I think, however, there are clear signs that Bunzl is moving in the right direction.

Organic sales growth is starting to pick up. And the firm’s June update reported that its North American business is “largely restored” after its problems last year. 

On top of this, Bunzl has an additional weapon. It has an acquisition pipeline to boost growth further.

I think the stock is well worth considering for investors hunting the next UK growth story. At 12% of my own ISA, it’s only diversification – not conviction – that stays my hand.

What do the analysts say?

The consensus view of Bunzl among analysts is Neutral. And it’s always worth remembering that there are no guarantees when it comes to investing. 

Bunzl’s recent challenges represent ongoing background risks. A recession in the US, a shift in strategy, or a challenging year for acquisitions are all potential issues. 

These are all worth taking seriously. The question for investors is whether the potential opportunity is worth it. 

I can understand the reasons for caution. But it’s worth remembering that Hold was also the consensus view among the analyst community for Rolls-Royce shares five years ago.

The lesson for investors is clear. Following the crowd can work, but the best opportunities often come from doing something different.

Should you invest £5,000 in Bunzl Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Bunzl Plc made the list?

Stephen Wright owns shares in Bunzl.

The post Here’s what the experts said about Rolls-Royce shares 5 years ago… appeared first on The Twelfth Magpie.

Often they’re the sort of ‘boring’ companies that quietly keep hospitals stocked, shelves filled, or factories running – year after year.

For me, the ideal candidate is a business that stays profitable in a downturn, maintains solid cash flow, and still has room to grow.

That’s usually a better route to long‑term wealth than chasing this month’s hyped-up tech pipedream.

So what are we looking for?

Every company gets hit by shocks. What matters is whether management has planned ahead and left themselves room to manoeuvre.

When I look at UK shares with long-term potential, I like to see:

• Thick order books or recurring revenue that don’t disappear when the economy slows.
• Strong cash generation and sensible debt levels, so it isn’t begging the bank for lifelines.
• Access to reliable financing, which lets it keep investing when weaker rivals are forced to retreat.
• A clear history of using downturns to win new customers or grow market share.

That combination is powerful. It’s how some firms actually come out of a crisis stronger than they went in.

One good example

One FTSE 100 name that fits this template well is Bunzl (LSE: BNZL). It’s a distribution and outsourcing group that supplies everyday essentials such as packaging, cleaning and hygiene products, medical consumables and PPE.

It supplies foodservice, grocery, healthcare, cleaning and retail clients across more than 30 countries worldwide. Because these products are non‑discretionary, a single weak sector or region typically doesn’t knock the whole group off course.

In 2008, during the global financial crisis, it managed to grow revenue by 17% and operating profit by 15%. In the Covid period, revenue rose 9.4% and operating profit increased 20.9%.

Over time that resilience has translated into hard numbers: in 2024, Bunzl generated revenue of £11,776.4m and adjusted operating profit of £976.1m. It also reported cash conversion of 93% and a return on invested capital of 14.8%, indicating profits are backed by real cash, not accounting tricks.

Still, no stock is risk-free. As a global supplier, it faces foreign exchange swings, regulatory risks, and supply chain disruption. It’s navigated these challenges well in the past but there’s no guarantee that will continue.

Still, with huge scale, a diversified customer base, and a long record of acquisitions, its long-term potential is hard to ignore.

Putting it together

Nothing is a guaranteed money-maker, and no single share will make a millionaire on its own. But by focusing on companies that are resilient, cash‑generative and opportunistic in downturns, an investor can tilt the odds in their favour.

Bunzl is just one example to consider. Another UK name with similar qualities is Unilever, which delivered €60.8bn of turnover in 2024 but is currently going through a tough turnaround phase. Diageo is also a popular choice among wealth compounders, but despite a massive global market share, changing consumer habits have hit its bottom line.

That’s why diversification is so important – markets are constantly shifting, and yesterday’s golden ticket could be tomorrow’s dead weight. For that reason, Bunzl is high on my watchlist for 2026.

Should you invest £5,000 in Bunzl Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Bunzl Plc made the list?

Mark Hartley owns shares in Diageo and Unilever.

The post Want to retire rich? Here’s how to identify the best UK shares for long-term wealth appeared first on The Twelfth Magpie.

But when I look at global stock markets today, I see bubbles inflating everywhere. For example, South Korea’s KOSPI index has soared an astonishing 176% in 12 months. Also, the US stock market is hitting valuation levels not seen since 1929, just before the infamous Wall Street Crash. Then again, UK shares still look cheap to me, including this one…

A great British business?

One old City of London expression reads, “Fund managers talk up their own books”. In other words, investors tend to sing the praises of shares they already own.

For example, my family portfolio owns the stock of Bunzl (LSE: BNZL), whose shares have endured a rough ride since hitting all-time highs almost two years ago. On 18 September 2024, this FTSE 100 share peaked at 3,732p, but then began tumbling.

At its 52-week low, Bunzl stock bottomed out at 1,981p on 21 January, down a whopping 46.9% from its record high. Back then, I’d loved to have bought into this British supplier of disposable goods to other businesses.

Bunzl describes itself as a leading distribution and outsourcing company for food-service providers and food retailers. Its products include safety and hygiene equipment, chemicals, packaging, disposable tableware, personal protective equipment, and cleaning machinery.

For decades, Bunzl was a British success story, boosting its earnings through acquisitions and organic growth across North America, the UK and Ireland, Continental Europe, and the rest of the world (mostly Australasia).

Bunzl bounces back

My family owns this Footsie stock, paying 2,292p a share for our stake on 16 April 2025 — a day when the share price collapsed by 25.6%. I saw Bunzl as another ‘fallen angel’ — a solid, well-run company with temporarily depressed shares.

As I write, Bunzl shares stand at 2,638p, valuing this group at under £8.6bn. At this level, the stock trades on an undemanding 18.7 times historic earnings, generating an earnings yield of 5.3%. This means that the dividend yield of 2.8% a year is covered a healthy 1.9 times by trailing earnings.

Bunzl shares are up 27.1% in 2026 — just the kind of comeback I was hoping for. But while the stock is up 13.7% over one year, it has risen by a mere 8.6% over five years (dividends excluded).

I’m holding tight

My family’s Bunzl stake has a paper gain of 13.1%, excluding reinvested dividends. But I have no intention of selling these shares, because I see Bunzl as a prime candidate for powerful private-equity buyers.

With revenues and earnings stabilising and recovering, this ‘boring, undervalued’ company could become a takeover target. Indeed, activist investor Elliott Investment Management recently joined the shareholder register.

Of course, Bunzl might endure yet more quarters of weaker growth and lower margins, hitting its revenues, earnings, and cash flows. But this 172-year-old FTSE 100 firm has been around since 1854, so I think there’s plenty of life left in old Bunzl yet!

Here’s another exciting income stock on my radar…

What income stock do we like better than Bunzl Plc right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

And the best bit is that you can see if for yourself, right now, absolutely free of charge!

No jargon. No hard sell. Just a clear look at an income share we think is worth your time.

Cliff D’Arcy has an economic interest in Bunzl shares.

The post Up 27.1% in 6 months: a FTSE 100 share paying out 2.8% a year! appeared first on The Twelfth Magpie.

In most cases, I don’t think so. It’s unlikely to change the way most people invest, but it’s always important to be on top of the latest regulations.

What’s happened?

In 2025, the Chancellor reduced the annual Cash ISA contribution limit to £12,000 from April 2027, while the Stocks and Shares ISA limit stayed at £20,000. But there were still some gaps. This week the government closed them.

Three measures arrive in April 2027: 

• A flat 22% charge on interest earned on uninvested cash held inside a Stocks and Shares ISA.
• A ban on portfolios invested entirely in money market funds.
• A block on transferring funds from a Stocks and Shares ISA into a Cash ISA for the under-65s. 

Each rule directly plugs a route for anyone trying to shelter £20,000 in cash without actually investing. It’s a blow for anyone with uninvested cash but the logic makes sense.

The reforms are supposed to encourage investing in businesses. But why? When I bought Bunzl (LSE:BNZL) shares, the firm didn’t benefit – the cash went to the previous owner.

The answer is reflexivity. More buying bids up the stock, and a higher price is useful for things like acquisitions (more on that later), or defence against unwanted takeover approaches.

UK stocks have broadly traded at a discount to international peers, which weakens that currency. Higher retail participation helps close the gap.

What to buy right now?

I actually still like the look of Bunzl shares right now. I think it’s an impressive business, but the stock is around 27% off its all-time highs.

The firm sources products like packaging, cleaning supplies, and PPE – consolidates them, and distributes them. In doing so, it saves customers time and money.

Since 2004, the company has made over 220 acquisitions to boost its growth. These have been – and remain – a key part of Bunzl’s growth story.

That means the firm needs a steady supply of potential targets available at sensible prices. And in 2025, the committed spend was well below the five-year average.

I’m keeping a close eye on this. But with a pipeline of over 1,300 potential targets, I’m still optimistic about things picking back up.

More positively, I’m also watching the growth of the firm’s own-brand products. If Bunzl can get this right – and this isn’t guaranteed after a big error last year – it should boost margins.

What to buy right now?

Stocks and Shares ISAs are a hugely valuable asset. But they are not, the government has now made clear, a higher-limit Cash ISA in disguise. 

Bunzl is already a big part of my ISA, so I’m thinking carefully. But for anyone with cash to deploy, the stock is worth a look right now.

Should you invest £5,000 in Bunzl Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Bunzl Plc made the list?

Stephen Wright owns shares in Bunzl.

The post How do the government’s latest changes affect your Stocks and Shares ISA? appeared first on The Twelfth Magpie.

These companies don’t often make headlines. But that’s exactly why they can be outstanding opportunities. 

AI data centres

Whether it’s in the desert, the sea, or space, everyone is trying to build artificial intelligence (AI) data centres somewhere. Or at least, that’s what it seems. 

Even Allbirds – a company that used to make shoes – has made a pivot to becoming an AI business. The plausibility of this is left as an exercise for the reader.

Right now, the stock market isn’t really interested in companies that aren’t trying to build data centres somewhere. But I think long-term investors should be.

In fact, it’s exactly because these businesses aren’t attracting attention that they’re worth paying attention to. A number are trading at attractive multiples right now.

Long-term wealth isn’t built on being one step ahead of the latest market fashitrendons. It’s built on buying companies that can quietly compound your capital while you sleep.

Being irreplaceable

Boring businesses are predictable – this is exactly what makes them boring. But that doesn’t have to be a bad thing for investors. 

When a company provides a service or product that its clients can’t do without, it becomes valuable. Especially if it doesn’t account for much of the customer’s overall operating costs.

Such companies are incredibly hard to compete with. They have huge advantages based on scale, efficiency, and existing customer relationships that are difficult to disrupt.

None of this is exciting. And that means the stock market can get bored with them, especially when there are more exciting things going on – like right now.

Sooner or later though, investors tend to appreciate the value of these stocks. So the time to consider buying is when they’re unusually cheap. 

A FTSE 100 stock I’m holding steady on

Bunzl (LSE:BNZL) is a perfect example of this from the FTSE 100 — and my own portfolio. It distributes things like cleaning products, packaging, and safety equipment.

None of this is exciting, but that’s the point for two reasons. One is that the firm solves a real issue for its customers and adds genuine value. 

Sourcing hundreds of everyday items can be mundane and time-consuming. Bunzl’s scale means businesses can find what they need under one roof.

Swings between high inflation and product deflation have been challenging recently. And they remain an ongoing challenge for the company.

Selling things like rubber gloves and food labels also isn’t the kind of thing AI investors are interested in. At least, not most of the time.

What’s the latest news?

The latest news is that activist investor Elliott Management has bought a 5% stake in the business. And the firm is pushing for an increase in share buybacks. 

I have mixed views on this. I think Bunzl has a great record of rewarding patient investors, but a push for share buybacks seems like the opposite of this. 

I’m ignoring the noise and holding for the long haul. But it might be a good time to consider adding to my investment.

Should you invest £5,000 in Bunzl Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Bunzl Plc made the list?

Stephen Wright owns shares in Bunzl.

The post Why boring is often best when it comes to buying stocks appeared first on The Twelfth Magpie.

That strategy isn’t foolproof. I’ve missed a few top momentum stocks as a result. But over the long run, it’s worked out pretty well for me. It takes patience, though. Companies often need time to regain direction and momentum after things go wrong.

FTSE 100 distribution specialist Bunzl (LSE: BNZL) was on my watch list for years. The shares looked unstoppable, but then trouble hit.

Why did the shares suddenly plunge?

Bunzl built a fantastic long-term record supplying everyday essentials such as disposable cups, cleaning products, rubber gloves, and high-vis jackets to businesses around the world. It’s expanded aggressively, buying more than 200 companies over two decades.

Bunzl increased its dividend every year for more than 30 years, while revenues and profits climbed steadily too. Investors loved its sheer steadiness. Then came the shock.

On 16 April 2025, the Bunzl share price crashed 25% after it issued a profit warning and halted its share buyback programme. What went wrong? Quite a lot.

Bunzl lost a high-margin grocery customer in North America and struggled with the rollout of its own-brand products, while US tariffs and and slower economic growth further hit sentiment.

I’ve learned that the first profit warning often heralds further trouble, so took my time. I began drip-feeding money into Bunzl last September, and bought it again in October and December. Then sat tight.

Is the recovery finally gathering pace?

Bunzl shares are starting to motor again. They’re up almost 20% so far in 2026, driven by a 7% jump in the last week alone. The business recovery still looks tentative though. Full-year results (2 March) showed revenues rising 3% at constant exchange rates in 2025 to £11.8bn, but that was largely thanks to acquisitions.

Adjusted operating profits fell 4.3% to £910.3m. That was disappointing, given prior growth.

• 2025 – £910.3m
• 2024 – £976.1m
• 2023 – £944.2m
• 2022 – £855.9m
• 2021 – £752.8m

There were positives too. Bunzl generated £579m of free cash flow and achieved a cash conversion rate of 95%. The board also lifted the dividend again, albeit by a modest 2.7% to 74.1p per share.

Bunzl has absorbed US tariff worries, but what it really needs is a stronger global economy. If growth remains sluggish, as seems likely with the Iran war dragging on, progress could remain slow.

Personally, I still think Bunzl looks attractive after last year’s sell-off. The valuation has cooled considerably, with a price-to-earnings ratio of 13.8. The trailing dividend yield is 3%. I think it’s well worth considering for investors seeking a blend of income and long-term growth. But I accept there are racier FTSE 100 recovery stories around right now.

Should you invest £5,000 in Bunzl Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Bunzl Plc made the list?

Harvey Jones owns shares in Bunzl.

The post This beaten-down UK growth share is also a dividend investor’s dream appeared first on The Twelfth Magpie.

While the wider market has become concentrated in data centre stocks, my portfolio is still diversified. As a result, I’m in a better position to withstand certain shocks.

A time for everything

’Tis written in the book of Ecclesiastes:

“There is a time for everything, and a season for every activity under the heavens:

A time to be born and a time to die,

A time to plant and a time to uproot,

A time to kill and a time to heal,

A time to tear down and a time to heal,

 A time to tear down and a time to build,

A time to mourn and a time to dance …”

It goes on – you get the idea.

It’s a reminder that different things work in different environments. And the same is true of the stock market.

Why did the market fall on Friday?

The latest jobs report from the US sent the stock market down on Friday. The US added 172,000 jobs, more than the 85,000 expected.

That’s a good thing in some ways. But not when one of the big concerns is inflation leading to higher interest rates.

More people in jobs means more buying power in the economy. But with supply fixed, that creates a risk of rising prices. 

The assets most at risk are growth stocks. Higher interest rates decrease the present value of returns in the distant future.

The stock market

Right now, the global stock market is pretty concentrated. 64% of the FTSE All-World Index is US stocks and 35% is technology.

That means index funds are increasingly a bet on specific themes — most notably artificial intelligence (AI). But to some extent, that’s not what they’re supposed to be for.

A global index is supposed to provide some protection from specific risks. This, however, gets lost the more concentrated it becomes.

It might be that the best way for investors to do find some protection is by managing their own portfolios. And that’s what I’ve been doing.

Inflation protection

Shares in Bunzl (LSE:BNZL) climbed 4.86% last week. And the stock was higher after Friday’s US jobs report. 

There are a few reasons for this. One is that a stronger economy in its largest market should boost demand for the firm’s products.

Bunzl distributes the things businesses use every day. So companies keeping more people in work is a positive sign.

In terms of inflation, the story is a bit more mixed. It can weigh on demand if its customers start to see weaker sales themselves.

On the plus side, Bunzl can often pass on the effect of higher costs. And if its customers do keep coming, it can result in higher revenues.

Being a good investor

Building a portfolio is about balance. There’s nothing wrong with AI stocks, but it’s always worth keeping an eye on other names as well. 

These can offer protection in tougher environments. And this is why my Stocks and Shares ISA went up on Friday.

At 32% off its all-time highs, I think Bunzl is still worth a look. If inflation disrupts the AI trade, it could offer valuable protection.

Should you invest £5,000 in Bunzl Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Bunzl Plc made the list?

Stephen Wright owns shares in Bunzl.

The post Here’s why my Stocks and Shares ISA climbed as the market fell on Friday appeared first on The Twelfth Magpie.

With this in mind, here are three FTSE 100 income shares to consider today. I think they could be great stocks to possibly buy and hold for at least the next 10 years.

Rock solid

Only 10% of FTSE dividend shares have grown the annual dividend for 25 years or more. Bunzl (LSE:BNZL) is one of these — shareholder payouts here have risen for 33 straight years.

The reason? While it makes more than half of sales from North America — which creates a big geographic risk — in other ways it’s actually well diversified. The firm sells a wide range of products across the globe many different industries (including healhcare, grocery and food service). This lessens the danger of localised profit shocks that can hit dividends.

That’s not all. Products ranging from toilet paper to surgical gowns, to food packaging, plastic cutlery and hi-vis vests stay in high demand across the economic cycle, supporting steady cash flows. Bunzl’s forward dividend yield is currently 3.4%.

A top trust?

The F&C Investment Trust (LSE:FCIT) has raised annual dividends for 55 consecutive years. One reason is trust rules that allow it to hold back 15% of income reach year. The result? In tough times, trusts can dip into their cash reserves to maintain dividend stability.

This particular one has another trick up its sleeve: exceptional diversification, with holdings across 387 different global stocks. What’s more, its portfolio is well split across cyclical and non-cyclical companies. It’s a mix that allows it to deliver dividend growth as well as a durable dividend even in tough times.

F&C’s dividend yield is 1.2%. That’s not the biggest, though that’s offset by the trust’s great record of inflation-busting raises. Be mindful that its sole focus on equities leaves its share price more vulnerable to stock market volatility.

Stunning dividend growth

Halma (LSE:HLMA) makes products that serve health, safety and environmental purposes. We’re talking about critical equipment like fire alarms and medical diagnostics systems. The result? Demand remains robust from year to year, underpinning strong cash flows it can use to pay dividends.

In fact, shareholder payouts have risen by 5% or more for 46 consecutive years. But that’s not Halma’s only secret. Like those other two income stocks I’ve described, its operations are well diversified thanks to its portfolio of 45 different businesses.

Changing health and safety regulations could impact future earnings, and with it dividends. However, I believe rules in Halma’s key markets are likely to tighten rather than slip back. The firm’s dividend yield is currently 0.8%.

Should you invest £5,000 in Bunzl Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Bunzl Plc made the list?

Royston Wild does not hold any positions in the companies mentioned.

The post 3 FTSE 100 income stocks to consider buying and holding for a decade appeared first on The Twelfth Magpie.

If you need dividends to fund your retirement, you could be in big trouble. Investors who hold income stocks to reinvest their dividends for portfolio growth might also feel some pain.

I myself buy FTSE 100 stocks for passive income. But I’m keeping my cool. Why? There are stacks of top dividend shares I’m confident will keep paying large and growing cash rewards regardless of broader pressures.

Here is just one passive income hero to consider today.

Dividend growth

Bunzl (LSE:BNZL) has a stunning 33 straight years of dividend growth behind it. For 2026, its dividend yield is 3.2%, fractionally above the FTSE 100 average.

So what makes Bunzl such a dividend hero? It has a highly defensive business model, supplying a range of everyday products from food packaging and medical gloves, through to cleaning supplies and industrial safety gear, all over the globe.

All very boring, you might say. But I love boring in this case — selling everyday essentials gives it excellent earnings visibility and robust cash flows, the lifeblood of any successful dividend stock.

What else?

There’s another big advantage to Bunzl’s excellent cash generation. It underpins the firm’s acquisition-based growth strategy. In the last 22 years it’s made 230 acquisitions, delivering robust long-term earnings growth that’s supported Bunzl’s proud dividend record.

Since 2004, Bunzl has committed £6.2bn in acquisitions to support a growth strategy that has delivered an annual adjusted earnings per share CAGR of c.9%, and has also returned £3.1bn to shareholders through dividends and share buybacks.

Richard Howes, chief financial officer

The problem is Bunzl’s under the cosh right now due to rare pressure in North America, its single largest market. Sales and margins have fallen, and conditions could remain tough if inflationary pressures persist.

Yet, I’m confident Bunzl’s share price will recover. And, in the meantime, investors can likely continue enjoying a growing and above-average dividend.

How so?

Dividends are never, ever guaranteed. But for the next two years, predicted earnings cover expected dividends between 1.9 and 2 times. This is widely in line with dividend cover of two times that investors seek out, providing a margin of error if profits are blown off course.

Bunzl’s strong balance sheet also provides flexibility for it to keep growing dividends. As well as enjoying resilient cash flows, the company’s net debt to EBITDA (earnings before interest, tax, depreciation, and amortisation) ratio is falling at the bottom of its target range of 2 to 2.5 times.

City analysts are confident dividends will keep rising over the near term. And so the 3.2% yield for this year moves to 3.3% for 2027. Investors seeking dividend security should give Bunzl shares a close look.

Should you invest £5,000 in Bunzl Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Bunzl Plc made the list?

Royston Wild does not hold any positions in the companies mentioned.

The post A quality FTSE 100 dividend share to buy to lock down a passive income? appeared first on The Twelfth Magpie.

Some people – perhaps from hope rather than experience – have the idea that if they invested a small amount in each of 50, 100 or even more shares, they might strike it lucky.

The idea of getting in early on the next Nvidia or Filtronic can set people’s minds (and calculators) racing when it comes to building serious wealth. But I think a different approach could offer more a less scattershot chance of success.

Investing, not gambling

Of course, if I had bought Nvidia shares early in their journey, I doubt I would now be complaining!

But I am an investor, not a gambler. To my mind, putting money into dozens or even hundreds of different shares in the hope that one or two them strike it big seems more like gambling.

After all, with such a large portfolio, how could I possibly hope to get to know the ins and outs of individual companies and assess their prospects?

While one or two shares could do well – perhaps even spectacularly well – there would likely be a fair number of duds in this approach of trying to cover the waterfront.

Zooming in on shares with brilliant prospects

That is why I think the smart way for someone to aim for a million is to do less, not more.

This can be illustrated quite simply. Over the past five years, the FTSE 100 index of leading British shares has risen 43%. But someone who bought only the best-performing 20 would have recorded an even stronger performance.

Someone who only bought the top five would have done even better.

Setting realistic goals

Of course, it is important to be a realistic investor not a daydreamer. Even with a brilliant return, someone who wants to aim for a million has a far quicker chance of success if they start with, say, £200k than if they start with £1k. I say “start with”, but that could be money they drip feed in over time.

But there is another big challenge here. Looking back over the past five years with the benefit of hindsight, anyone can see what shares did brilliantly.

But looking forward – as we must as investors – deciding what shares look most promising is a question of informed judgement, not fact.

Hunting for the right indicators

I am hanging on to my Bunzl (LSE: BNZL) shares because I hope they can do very well in the coming five years, whereas in the past five Bunzl’s share price gain of 2% lags far behind the FTSE 100.

There will be challenges. Inflation eating into profit margins is one, due to Bunzl’s complex global supply chain and the role of petrochemicals in producing some of its catering disposables like cutlery. High oil prices could hurt.

But the company has honed its business model over decades (and grown its dividend per share each year for decades too).

It benefits from a large customer base with regular needs for items from loo rolls to food trays. It has substantial economies of scale and aims to keep growing.

The post Here’s how someone could aim for a million with a handful of shares! appeared first on The Twelfth Magpie.