The FTSE 100 index is stacked full of household names such as Royal Dutch Shell, HSBC Holdings and Lloyds Banking Group. However, at the same time, the index also contains a number of less well known, under-the-radar stocks. Today, I'm looking at two such FTSE 100 stocks and, in my view, both have the potential for capital growth and dividends.
Bunzl(LSE: BNZL) describes itself as an 'international distribution and outsourcing group'. The £7.6m market-cap company specialises in providing businesses with essentials such as cleaning products, food packaging and safety consumables. Perhaps not the most exciting business model, but one that has been consistently profitable in the past.
Indeed, with the help of an active acquisition strategy -- the company has completed over 130 acquisitions since 2004 -- revenue and profits have charged higher in recent years. Between 2011 and 2016, the company's top line increased from £5,110m to £7,429m, with operating profit rising from £279m to £410m. City analysts expect revenue growth of a further 15% this year.
This morning's Q3 trading update shows signs of further progress. Revenue increased 11% in constant currency, through a combination of both organic growth and acquisitions, and the company stated that it expects to make further acquisitions over the coming months.
One key appeal of Bunzl is the company's dividend. While the prospective yield of 2% may not be the highest yield in the FTSE 100, the group has an outstanding growth track record, having increased its dividend for 24 consecutive years, at a compound annual growth rate (CAGR) of over 10%. Dividend growth like that can really boost long-term investment returns.
Bunzl is not the cheapest stock in the FTSE 100 - on a forward P/E ratio of 19.7. However, I believe the shares can continue to move higher over the long term if the company keeps growing through acquisitions. For investors seeking both capital gains and income, I believe Bunzl is worth a closer look.
Also offering under-the-radar growth and dividend appeal, in my opinion, is £5.6m market-cap Informa(LSE: INF).
The FTSE 100 company provides a broad array of products and services based on content, intelligence and connections to specialist communities worldwide. These include academic books and journals, data-driven intelligence publications and services, exhibitions, conferences and learning platforms.
Revenue at Informa has risen at a slow-but-steady rate in recetn years, rising from £1,130m in FY2013 to £1,346m last year. However, the company's top line is forecast to fire almost 30% higher this year, due to the transformational £1.2bn acquisition last year of US rival Penton.
Informa shares are up around 85% over a five-year investment time horizon, yet I believe there may be more gains to come for patient, long-term investors. Trading on a undemanding forward P/E ratio of 14.6, and sporting a prospective dividend yield of just under 3%, Informa shares look to offer value, in my opinion.
Edward Sheldon owns shares in Royal Dutch Shell. The Motley Fool UK has recommended HSBC Holdings, Lloyds Banking Group, and Royal Dutch Shell B. 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.