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I believe now’s a superb time to purchase FTSE 100 revenue shares, as so many look low-cost in the present day. At the moment, I’m concentrating on corporations which have proven they’re eager to reward loyal shareholders by growing their dividends yr after yr.
Gross sales and advertising agency DCC (LSE: DCC) might not spring out as a FTSE 100 dividend hero, with a trailing yield of simply 3.53%. Nonetheless, it’s a real Dividend Aristocrat, having hiked shareholder payouts for every of the final 19 years.
Dividend heroes
AJ Bell just lately calculated that DCC had hiked its dividend by a median of 10.8% yearly for the final decade. Now may very well be a superb time for me to purchase into this revenue stream. The DCC share value fell 4.42% final week, lowering its valuation to only 11.9 instances earnings. Over one yr, it’s up a stable 18.08%.
DCC is a tough firm to classify because it gives advertising providers to world companies and can also be one of many largest bottled gasoline suppliers on the earth. 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 gasoline costs ease, as this chart reveals.
Chart by TradingView
But on the identical time, the inventory has been getting dramatically cheaper, as measured by its price-to-book ratio. Take a look at this chart.
Chart by TradingView
Final month, JPMorgan Cazenove went ‘obese’ on the inventory and set a 6,700p value goal. That’s nearly 25% greater than in the present day’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 phase. I’ll purchase it when I’ve the money.
I’d prefer 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 superb present these days, rising 12.9% over one yr and 48.05% over 5.
Final month, Bunzl mentioned first-half revenues fell 3% to 4%, largely because of trade price swings, however would choose up within the second half. This chart reveals a slowdown, however the long-term image is encouraging, in my opinion.
Chart by TradingView
The board forecasts robust margin development this yr, boosted by its relentless acquisition drive (it’s spent £600m this yr and counting).
Its two current 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 instances earnings. The worth-to-book ratio has been sliding too, as this chart reveals.
Chart by TradingView
I believe now seems like a superb time so as to add Bunzl to my retirement portfolio too. I’ll reinvest all my dividends in the present day and begin drawing them as revenue sooner or later after I retire.
