Sage shares flying high
Sage is a developer and distributor of cloud-based accounting software for small to medium-sized businesses. I personally own Sage shares and they’ve performed well for me to date.
As I write, Sage shares are trading for 964p. At this time last year, they were trading for 742p, which is a 29% increase over a 12-month period. This is impressive considering many FTSE 100 shares have struggled in recent months.
Sage’s story to date is enviable, becoming a dominant market player from humble beginnings. It has a consistent track record of performance and has an excellent business model that includes recurring subscriptions to boost its healthy balance sheet.
With lots of cash, Sage can reward investors. A dividend yield of 2% isn’t the highest but I’m more interested in consistent and stable dividends. However, I do understand that dividends aren’t guaranteed.
From a risk perspective, Sage shares are currently trading at all-time highs. I’m conscious that any negative trading or bad news could send the shares tumbling. Furthermore, the artificial intelligence (AI) revolution has led concerns that the software products of tech firms like Sage might be obsolete or behind the times.
The good news is that Sage already incorporates AI tools within its offering. For that reason, I believe the business is primed for further growth by offering its customers the latest tech and keeping up with the times.
Overall, I believe Sage shares are a great option to consider as part of a diversified portfolio of stocks.
Bunzl shares struggle like other Footsie shares
Bunzl is one of the biggest distribution and outsourcing businesses in the world. With a presence in 30 countries, the business provides essentials such as disposable paper and plastic packaging supplies to a number of market sectors.
Bunzl’s share price journey is akin to many FTSE 100 shares in recent months. The shares have meandered up and down due to volatility. As I write, they’re trading for 2,846p, which is very close to the 2,850p level they reached at this time last year.
The company is dealing with macroeconomic issues. Firstly, supply chain issues could hinder its ability to provide its customers with the products they need. Next, soaring inflation and rising costs could be troublesome for the business as rising costs tend to take a bite out of profit margins.
However, there aren’t many FTSE 100 shares that can brag about increasing payouts for 30 years consecutively. Bunzl can! A yield of just over 2% today may seem modest but I’m buoyed by its fantastic record. However, I do understand that past performance is not a guarantee of the future.
Finally, I’d argue Bunzl’s products offer the business defensive characteristics. For example, it provides rubber gloves to the medical industry and packaging to the food industry. The essential nature of its offering has helped the business perform consistently and generate lots of cash to support its enviable investor return policy.
I think Bunzl shares look a great candidate for further research — they could even flourish further once this current volatility cools.