Bunzl’s share price fell by 5% after today’s update. Is this now a screaming buy?

I FTSE 100 it is falling this morning but nothing like this Bunzl (LSE: BNZL) price. The £11bn issuing group sank 5.17% in early trade today (17 December), the fastest faller in the index. This follows a mixed review for trading ahead of its year-end.

Bunzl is one of those unsung hero investors who tend to ignore, then check to see how well its stocks have done. At least, that’s what happened to me.

It must have been over five years since it first crossed my radar but I never bought one in that time. So what’s holding me back?

Time to buy this stock to maximize income?

Every time I looked at the stocks they seemed to be less expensive, as I had just run more. They are a little cheaper today, so this time I have no excuses.

Despite this morning’s dip, Bunzl shares are up 14.29% in one year and an impressive 69.43% over five.

Bunzl is easily overlooked because it does not have a consumer-facing role, but it quietly supplies everyday items to other businesses, such as disposable coffee cups, cleaning supplies, bandages and rubber gloves.

Far from being dull, it grows rapidly with regular purchases. 2024 was a record year here, having committed to spending £850m on 13 acquisitions. This is where the sharpest growth has come from this year.

Today’s update showed that 2024 revenue will increase by a stable 3% at constant exchange rates. At real exchange rates, it will be flat, or down 1%.

The group’s revenue growth was driven by acquisitions “with a slight decrease in basic income during the year”. The pipe remains tight.

A good classification record

The group’s adjusted operating profit in 2024 will still apply “represents strong growth compared to 2023 at constant exchange rates”said Bunzl, while operating margins will be slightly higher. Everything is small though.

2025 looks a little brighter, as the board expects “strong revenue growth in 2025 … driven by announced acquisitions and modest underlying revenue growth”. High margin purchases and “a good increase in the lower limit” he should help.

Bunzl launched a £250m share buyback in August, of which around £200m has been completed. It has confirmed another £200m purchase by 2025.

These are challenging times as the cost of living continues to rise and interest rates remain higher than expected, putting pressure on business costs. Now I wonder how import taxes will play into a global business like this. Bunzl has growth value, shares trade at 18.62 times earnings. It’s not exactly a bargain.

Christmas is coming and I don’t have money to buy this stock today. Come the New Year, it will be at the top of my shopping list. I have waited long enough. I just hope the share price hasn’t recovered by then.