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I believe now’s an excellent time to purchase FTSE 100 earnings shares, as so many look low-cost as we speak. At this time, I’m focusing on firms 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 might be time for me to purchase into this earnings 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 strong 18.08%.
DCC is a tough firm to classify because it provides advertising providers to world companies and can also be one of many largest bottled fuel suppliers on the planet. Some will see this as helpful diversification. Others as a distraction.
Retirement increase
Revenues recovered sharply after the pandemic, boosted by the power shock, however have slowed as fuel costs ease, as this chart exhibits.
Chart by TradingView
But on the similar 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 virtually 25% increased than as we speak’s 5,405p. It stated 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 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 present these days, rising 12.9% over one yr and 48.05% over 5.
Final month, Bunzl stated first-half revenues fell 3% to 4%, largely as a consequence of alternate price swings, however would decide up within the second half. This chart exhibits a slowdown, however the long-term image is encouraging, for my part.
Chart by TradingView
The board forecasts sturdy margin development this yr, boosted by its relentless acquisition drive (it’s spent £600m this yr and counting).
Its two current purchases, Brazilian medical system distributor RCL Implantes and Canadian hygiene merchandise specialist Clear Spot, point out Bunzl’s world attain and vary.
Bunzl is affordable by its requirements, buying and selling at 16.12 instances earnings. The worth-to-book ratio has been sliding too, as this chart exhibits.
Chart by TradingView
I believe now appears like time so as to add Bunzl to my retirement portfolio too. I’ll reinvest all my dividends as we speak and begin drawing them as earnings sooner or later after I retire.
