These 2 FTSE 100 unsung heroes could make you rich

Bunzl
Bunzl

To be rich is glorious, as former Chinese leader Deng Xiaoping once noted. However, it isn't always the glory boys who make investors rich. The unsung heroes can also play a part, as the following two stocks certainly have.

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Hot and tasty Bunzl

Specialist distribution group Bunzl(LSE: BNZL) first came to my attention just over four years ago. Back then I declared it an unsung hero of the FTSE 100, rolling up its sleeves and getting down to the unglamorous task of selling food packaging, catering equipment, cleaning supplies and safety equipment to businesses around the world. It now has a presence in 30 different countries, having recently added Singapore. I called it out as a strong long-term buy-and-hold and it has continued to clean up.

Clean and mean

Bunzl's share price is up 137% over the last five years, almost five times the growth of the FTSE 100 over the same period. It has been driven by the company's aggressive acquisition policy, with a current committed spend of £184m across 14 businesses. Its average return on operating capital is an impressive 55.9%, with return on invested capital of 16.7%. The firm's broad geographical spread, with interests across the US, UK, Europe, Australasia and Latin America, adds defensive solidity.

Recently published results for the firm for 2016 show a 14% rise in revenues to £7,429m and statutory operating profits up 12% to £409m. Bunzl may never catch the eye, but the strength, resilience and reliability of its business model more than make up for that. It looks pricey at 21.74 times earnings, while the yield disappoints at 1.83%. However, management policy is progressive, hiking the dividend 11% last year to continue a 24-year track record of growth.

Mondi Man

International packaging and paper group Mondi (LSE: MNDI) makes Bunzl look a lightweight in terms of share price performance, with the stock up an incredible 223% over the past five years. This is another of unacknowledged hero of the UK economy, operating in more than 30 countries.

Last month it reported a 3% rise in underlying operating profit to EUR981m with a healthy return on capital employed of 20.3%. This continues the steady growth in profitability seen over the last five years. Like Bunzl, Mondi is also playing the acquisition game, making four over the period at a cost of EUR185m.

The full Mondi

It is one of the rare FTSE 100 companies that has reported a net negative impact from foreign exchange rate volatility. That EUR31m impact contributed to the 2% drop in group revenue to EUR6,662m. Emerging market currencies were at the heart of the problem, notably the Russian rouble, Turkish lira, Polish zloty and Mexican peso. Cash flow remains strong however, rising 10% to EUR1,401m, while net debt fell by EUR115m to EUR1,383m, which helped fund a 10% hike in the dividend. Current yield is 2.56%.

Management has warned of inflationary cost pressures, more challenging trading in some markets and further emerging market currency volatility. However, given that the stock is up nearly 48% in the last year alone, it doesn't look unduly expensive at 16.19 times earnings. Hero status confirmed.

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Harvey Jones has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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