Glamorous it ain't. Supplying loo roll, tea bags and plastic cutlery to workplaces worldwide may not set the investor pulse racing, but it's proved very lucrative for Bunzl in recent years. Organic growth has been tortoise-like in recent years, typically growing by around a percentage point more than the GDP of the host country and slowing to a near-standstill in the second half of last year. Yet Bunzl has been adept at speeding things up through small and medium-sized acquisitions. Last year it snapped up 13 businesses, from an American distributor of disposable gloves to a Swiss paper napkins business. Overall, it bought an additional half billion pounds' worth of sales.
Analysts are pencilling in profits this year of £350m and a dividend of more than 30p. At yesterday's closing price of £12.25, that would put Bunzl on a price/earnings ratio of 16 times and a prospective yield of 2.4%. That looks a little pricey, even for this well-managed, well-disciplined business. After all, it was trading on as little as ten times earnings four years ago. Given the high valuation, the shares
would be punished by any stumble and the acquisition spree is bound to produce the occasional turkey, says The Times´s Tempus.
An important date is looming for Persimmon investors. They are soon to receive their first payment in the company's £1.9bn cash return. New investors need to get on the shareholder register before April 19th to receive the 75p special dividend, paid in June. There is also the prospect of a 95p dividend to be paid by June 2015. Yesterday's full-year results came in a touch ahead of market expectations. A combination of a 6% increase in the average selling price of Persimmon's properties to £175,640 and a 6% increase in completions to 9,903 helped boost revenues by 12% to £1.7bn.
The shares are trading on a 2013 earnings multiple of 14.2 falling to 12.6 next year. This is obviously not "cheap" and there are broader market concerns to contend with after such a bull run, however, the cash return policy underscores an investment. Despite the shares being propelled to a five-year high after yesterday's results, Persimmon remains a buy for income seekers, The Telegraph´s Questor team says.
Robert Hiscox bowed out of the specialist insurer that bears his name in feisty style yesterday. The chairman of 43 years announced better-than-expected annual profits, smashed forecasts with 200m pounds of dividends and still had breath to berate the Prime Minister over his sound bite politics on flood damage before departing for a celebratory holiday in Brazil. Growth opportunities abound, not only in grabbing a bigger share of the insurance needs of the professional classes of Britain, but also in France, Germany and America.
The pricing environment is stable, if unexciting. A strong brand and a superior grasp of the benefits of IT have made Hiscox the company to beat. But most of that potential is already in the share price, which, after yesterday's 3.5% rise to 516p, stands at a hefty 47% premium to net assets. A good company with bags of potential, but the shares are dear, Tempus writes.
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