When searching for a high dividend inventory, I’ve developed the questionable behavior of beginning with those who boast the best yields.

That’s very tempting, particularly at present, when there are some sensible revenue alternatives throughout the FTSE 100. However a excessive yield isn’t every thing. Generally modest payouts disguise a cracking observe document of long-term dividend development.

One such inventory is Bunzl (LSE: BNZL). The worldwide distribution and companies group has been on my watch checklist for years. I’ve even referred to as it the FTSE 100’s best darkish horse.

It isn’t a family identify. Bunzl gives important non-sale objects to companies: issues like gloves, packaging, and cleansing merchandise. These are the provides that preserve hospitals, supermarkets and factories working easily.

Quiet FTSE 100 hero

But it surely’s not a plodding blue-chip both. Bunzl has been rising steadily by good acquisitions. In 2024 alone it dedicated £883m throughout 13 offers, increasing its world attain. And it introduced two healthcare acquisitions on 30 April, one in Chile and one other within the Netherlands.

In early March, Bunzl appeared in glorious well being. Full-year outcomes confirmed revenues up 3.1% to £11.8bn. Adjusted working revenue rose 7.2%, with margins nudging up from 8% to eight.3%. The dividend climbed 8.2%. Extremely, this marked its thirty second consecutive 12 months of annual dividend development.

Over the past decade, Bunzl has elevated shareholder payouts at a median compound development charge of seven.61% a 12 months. But traders wouldn’t realize it was such an revenue celebrity by wanting on the modest trailing yield of three.17%.

Then got here the crunch. On 16 April, Bunzl issued a revenue warning after a tough first quarter. It lowered full-year steerage, citing weaker buying and selling in North America and stress on margins throughout the UK and Europe.

Revenues rose 2.6% at fixed change charges, however fell 0.9% on an underlying foundation. North America, its largest market, was hit by mushy income and better prices. European and UK operations additionally struggled, though the remainder of world did higher.

This seems to be down to a mixture of Donald Trump’s tariff threats, that are a nightmare for an internationally diversified enterprise like this one, and wider financial considerations.

Shares underneath stress

The shares crashed 23.1% in a day, they usually’re now down 30% in three months. Over 12 months, they’ve fallen 20%. That’s uncommon for a gradual compounder like Bunzl.

Is that this the shopping for alternative I’ve been searching for? The shares now commerce on a ahead price-to-earnings ratio of round 12. Low cost, by its requirements.

Lengthy-term considering required

The consensus goal price from analysts is 2,772p, which might mark a possible achieve of greater than 18% from the place we’re at present. However these estimates might not mirror April’s shock steerage minimize.

Out of 18 analysts, 9 charge Bunzl a Purchase, 5 say Maintain and 4 say Promote. I’m not shocked the view is blended. Shopping for after a revenue warning might be dangerous. I’ve accomplished it these days with Diageo, JD Sports activities and Ocado Group, and I’m nonetheless ready for these to come back good.

Bunzl might bump alongside for some time too. However I just like the enterprise. For affected person traders who take a long-term view, I believe it’s one to contemplate shopping for.