I’m a agency believer that the best and most secure option to construct wealth over time is to put money into high-quality FTSE 100 blue-chip shares that prioritise rising shareholder returns. So after I unearthed a enterprise that has grown its dividend per share at a compound annual progress charge of 9.5% for over three a long time, my curiosity ranges perked up.

Distribution powerhouse

The inventory is worldwide distribution and providers specialist Bunzl (LSE: BNZL). This enterprise distributes predominantly goods-not-for-resale together with packaging and non-food consumables. Its prospects vary from massive retailers to small impartial shops and eating places.

The inventory hit the headlines earlier within the yr when it issued a uncommon revenue warning, after income and working revenue declined in North America, its largest market. A mix of poor technique execution, deflation and a big buyer loss, led to the share price dropping 1 / 4 of its worth in a day.

Misfiring technique

Over the previous couple of years the enterprise has pivoted towards rising its portfolio of higher-margin, own-branded, sustainable packaging options. These embody the likes of ecosystems, verive and maintain. In 2024, such merchandise accounted for 14% of whole gross sales, up from 5% the earlier yr.

Complementing this pivot, it modified the organisational construction from a predominantly branch-based one to a gross sales and operational mannequin. Hiring a centrally-managed skilled gross sales staff labored properly for giant nationwide accounts. Nevertheless, it turned out to be fully the improper mannequin for managing smaller, native accounts.

Centrally-managed gross sales groups discovered themselves being price undercut by smaller, native and extra nimble opponents.

Giant accounts have additionally suffered due to poor technique execution. The enterprise additionally disclosed it had misplaced a high-margin buyer, though it failed to call it.

Dividends

The falling share price has pushed the trailing dividend yield up to three.1%. That is significantly increased than its long-term common of two.5%.

The corporate may not be an enormous dividend payer but it surely’s long-term progress that issues extra to me. Final yr, it hiked the dividend per share by 8.2%. Dividend cowl’s additionally comfortably above two occasions earnings. This supplies the enterprise with loads of headroom to extend payouts once more this yr.

Acquisitions

Over the a long time the corporate’s grown from a small, regional participant into a global powerhouse via an aggressive acquisitions technique. In 2024, 13 new companies have been swallowed up into the Bunzl model, at a price of £883m. The most important of those was UK-based omni-channel distributor of catering tools, Nisbets. It additionally acquired its first enterprise in Finland, Pamark.

Such an acquisition binge doesn’t come with out danger. For instance, quickly after shopping for Nisbets, its automated warehouse flooded. Nevertheless, the fragmented nature of the trade supplies Bunzl with a rare pipeline of additional progress alternatives.

Throughout all its key sectors, long-term structural progress drivers stay in place. Throughout healthcare, this contains the expansion of care at house and ageing populations. In grocery, it’s the push for sustainable packaging and the outsourcing of non-food necessities. And in meals providers, this contains the expansion in takeaways and residential deliveries.

I view the latest firm woes and share price weak point, as a inventory to think about. It actually is on my watchlist for when I’ve out there free funds.