runaway inflation is no impediment to growth for this FTSE 100 stock

Meanwhile, the performance of its underlying business could be improved by continued investment in digital opportunities. The proportion of the company’s customers ordering products online increased by eight percentage points to 67% between 2018 and 2021.

Digital sales reduce its costs and provide a faster ordering system for customers who should further differentiate its offering.

Clearly, the company’s personal protective equipment sales are declining as Covid becomes rampant. However, its wide range of operations and geographic diversity means it is likely to weather short-term shifts in demand across all of its products.

In recent months, the company’s stock has benefited from its international exposure. The strong dollar, coupled with the fact that 60% of Bunzl’s revenue is generated in North America, drove its stock price higher. It is now 46% higher than when we first advised in May 2019.

While an expected P/E ratio of 19 is by no means cheap, the company’s risk/reward opportunity remains very favorable. Its strong financial position provides scope for more acquisitions, while its ability to pass on higher costs to customers in an era of runaway inflation means it deserves a higher valuation.

Questor says: buy

Symbol: BNZL

Share price at close: £30.65

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