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Experienced Investor

Stock of the week: Bunzl

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
27/11/2017

Graham Spooner, investment research analyst at The Share Centre, picks international distribution and outsourcing group Bunzl as stock of the week.

Bunzl is a company engaged in the distribution and outsourcing of services across the world and is best known for being a supplier of food packaging, hygienic clothing, paper and plastic disposables. It is a company that offers defensive attractions in a time where markets are jittery. Adding to this, the business has continued to make steady progress despite difficult market conditions, suggesting management have a solid business model.

The group has been expanding its global presence, which investors should recognise has protected it from regions that have suffered more. This is set to continue given it has a strong market-leading position and a good track record of growth through acquisitions.

Indeed, Bunzl’s approach to making acquisitions – of which it has made 13 so far this year – in order to boost revenue and profits, continues to work well. Investors should acknowledge that this has led to improving dividends and a solid share price performance.

The share price has fallen back from its all-time high in May, potentially providing a better entry point. As a result, we recommend Bunzl as a ‘buy’ for investors seeking a lower level of risk with a balanced portfolio.