The John Menzies(LSE: MNZS) share price chart over the past five years looks a bit like the Grand Canyon -- a steep drop, the whole of 2015 spent crossing the bottom, and then a happy climb all the way back up again.
But the shares have doubled in the past two years, as the company's recovery looks like it's firmly established and growth is back on the cards.
After several years of falling earnings, a return to EPS growth last year with a 43% boost halted the trend, and analysts are forecasting a further 15% lift this year, followed by 12% next.
Interim results released in August showed a strong performance from Menzies Aviation (going "from strength to strength" according to chairman Dr Dermot F. Smurfit), with Menzies Distribution tagging along "in line with expectations".
A trading update Thursday reinforced the firm's positive outlook, telling us that it has "continued to trade well since the half year" and that full-year expectations should be met.
The big challenge is going to be the splitting of the two divisions into separate companies -- many investors have wondered for years why the two disparate businesses are being run under the same umbrella.
To that end, the firm has appointed Rothschild to help with a strategic review which would asses "the optimum route to split the group and create two strong focused players in their respective markets," and we should know what's due to happen by March 2018.
Meanwhile, the dividend is powering up ahead of inflation, and with yields currently around 3% and a P/E at around 12, I see a chance to lock in that trend at a good price now.
One of the best
For steady long-term earnings and dividend growth, you don't need to look much further than Bunzl(LSE: BNZL), the international distribution and outsourcing group.
Earnings per share have grown 50% between 2012 and 2016, and forecasts would take that up another 12% by 2018. And the dividend should have risen from 28.2p per share in 2012 to 48.4p by 2018 -- that's a rise of 72% in six years, and way ahead of inflation. In fact, Bunzl has lifted its dividend for 24 straight years.
Dividend yields are currently only around the 2% mark, but that hides the effective future yields that can be had by locking-in to long-term progressive rises. In fact, had you bought Bunzl shares five years ago at around 1,020p, the predicted 2017 dividend would give you a 4.5% yield on that price -- oh, and you'd also have enjoyed a doubling in the share price.
The long-term prospects for expansion look good, after the company confirmed on Thursday that the acquisition of Hedis, Comptoir de Bretagne and Générale Collectivités in France has completed.
Bunzl has also bought up Interpath, a Melbourne-based distributor of laboratory and healthcare consumables, and has agreed to acquire Talge of Brazil, a seller of various food service products.
With a company doing so solidly well, you probably wouldn't expect the shares to be on a bargain basement rating. And you'd be right -- at a 2,170p price, we're looking at a forward P/E of 19 this year, dropping to 18 next.
But enduring quality is worth paying for, and compared to the long-term FTSE 100 P/E of around 14, I don't see that valuation as too high at all -- I see a bargain.
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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.