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I believe now’s an excellent time to purchase FTSE 100 revenue shares, as so many look low-cost at the moment. At this time, I’m concentrating on firms which have proven they’re eager to reward loyal shareholders by growing their dividends 12 months after 12 months.
Gross sales and advertising agency DCC (LSE: DCC) could not spring out as a FTSE 100 dividend hero, with a trailing yield of simply 3.53%. Nevertheless, it’s a real Dividend Aristocrat, having hiked shareholder payouts for every of the final 19 years.
Dividend heroes
AJ Bell not too long ago calculated that DCC had hiked its dividend by a median of 10.8% yearly for the final decade. Now might be a great time for me to purchase into this revenue stream. The DCC share value fell 4.42% final week, lowering its valuation to simply 11.9 occasions earnings. Over one 12 months, it’s up a stable 18.08%.
DCC is a tough firm to classify because it gives advertising providers to world companies and can be one of many largest bottled fuel suppliers on this planet. Some will see this as helpful diversification. Others as a distraction.
Retirement enhance
Revenues recovered sharply after the pandemic, boosted by the power shock, however have slowed as fuel costs ease, as this chart reveals.
Chart by TradingView
But on the similar time, the inventory has been getting dramatically cheaper, as measured by its price-to-book ratio. Try this chart.
Chart by TradingView
Final month, JPMorgan Cazenove went ‘overweight’ on the inventory and set a 6,700p value goal. That’s nearly 25% larger than at the moment’s 5,405p. It mentioned DCC ought to profit from the rising European photo voltaic set up market and rising gross sales in its healthcare section. I’ll purchase it when I’ve the money.
I’d wish to match it with FTSE 100 distribution and outsourcing group Bunzl (LSE: BNZL). It’s additionally a Dividend Aristocrat whose low 2.21% yield masks the truth that it has hiked payouts for twenty-four consecutive years.
The shares have placed on a great present currently, rising 12.9% over one 12 months and 48.05% over 5.
Final month, Bunzl mentioned first-half revenues fell 3% to 4%, largely as a consequence of change charge swings, however would choose up within the second half. This chart reveals a slowdown, however the long-term image is encouraging, for my part.
Chart by TradingView
The board forecasts robust margin progress this 12 months, boosted by its relentless acquisition drive (it’s spent £600m this 12 months and counting).
Its two latest purchases, Brazilian medical gadget distributor RCL Implantes and Canadian hygiene merchandise specialist Clear Spot, point out Bunzl’s world attain and vary.
Bunzl is reasonable by its requirements, buying and selling at 16.12 occasions earnings. The worth-to-book ratio has been sliding too, as this chart reveals.
Chart by TradingView
I believe now appears to be like like a great time so as to add Bunzl to my retirement portfolio too. I’ll reinvest all my dividends at the moment and begin drawing them as revenue sooner or later after I retire.
