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Stock of the week: Bunzl

Written by: Ian Forrest
This week’s stock tip is a FTSE 100 company that tends to be overlooked, despite good defensive qualities.

Ever thought about where the disposable cup comes from when drinking your morning coffee? Or even the napkin that you use to clean up the spillage when that coffee falls victim to a bump in the road or jolt on the train? Well, the likelihood is that it could have been made by this week’s share tip of the week – Bunzl.

The group provides a variety of every day products ranging from disposable cups, safety equipment, napkins all the way to food packaging. Investors should appreciate that this FTSE 100 company operates in over 30 countries and the majority of revenue comes from outside the UK, which is not unusual for those in the UK’s blue-chip index. Moreover, this global presence provides some protection against individual regions that may be underperforming.

Bunzl’s strategy of making acquisitions to boost revenue and profit is continuing to work well. This has led to improving dividends and solid long-term share price performance. We’ve opted for it as our share tip this week as a result of recent market downturn presenting a good opportunity to get in.

Investors should acknowledge that management have been keen to highlight the company’s position as a market leader and the company’s continual steady progress suggests management has a good business model. As a well-managed business with defensive qualities and improving dividends we recommend the group as a ‘buy’ for longer term investors with a balanced portfolio.

Ian Forrest is investment research analyst at The Share Centre

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