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1 FTSE 100 dividend share I’d buy and hold forever

Bunzl (LSE: BNZL) may not be packing the sort of yields that make the heart race. But thanks to the brilliant earnings visibility created by its broad range of operations, the support services play is, in my opinion, one of the best shares out there for investors seeking relentless payout growth. After all, it has hiked the full-year reward for 24 years on the spin.

City brokers do not foresee this trend ceasing any time soon. The 42p per share dividend shelled out in 2016 is predicted to rise to 45.5p per share in the current year, helped by an anticipated 7% earnings advance. And with profits expected to grow a further 5% in 2018, dividends are expected to rise to 48.5p. These projections yield a handy-if-unspectacular 2.1% and 2.3% respectively.

Bunzl’s reputation as a growth and dividend star was underlined by latest financials in October in which it said that revenues increased 11% between July and September thanks to a mix of solid organic growth (of 5%-6%) and the 6% contribution of recent acquisitions.

And with the FTSE 100 star advising that it “expects to make further acquisitions over the coming months” (it has made 11 in the year to date), the future remains extremely bright. I reckon Bunzl is a great pick right now and fully worthy of a premium forward P/E ratio of 18 times.

Parcels powerhouse

Even as the letters market continues its inexorable decline, I believe that Royal Mail (LSE: RMG) also remains an attractive long-term investment destination, and particularly for dividend chasers.

You see, with shoppers across the globe swapping their jackets for jim-jams and making their purchases online in ever-greater numbers, demand for the courier’s services should keep on climbing.

Indeed, latest data from the Office for National Statistics this week highlighted the brilliant revenues opportunities for couriers like Royal Mail. While retail sales growth in the UK is slowing at an alarming pace (indeed, total sales actually dipped 0.3% in October), orders made through cyberspace still continue to race higher (these rose 10.3% year-on-year last month).

And the vast investment Britain’s retailers are making in their multichannel operations should keep the e-commerce market steadily expanding. Royal Mail saw parcel volumes in Blighty increase 6% in the half year ended September 24, it advised last week.

Jaw-dropping yields

Meanwhile, it can also look to its foreign operations to deliver resplendent earnings growth in the years ahead, with parcels traffic also being helped abroad by ever-improving economic conditions.

During the first fiscal half, the courier saw packages volumes at its GLS pan-European division boom shoot 9% higher. And Royal Mail has big plans to capitalise on this splendid growth market through ongoing M&A action.

Even though City analysts are predicting an earnings decline of 12% in the year to March 2018, the FTSE 250 giant’s bright long-term outlook is expected to keep dividends moving skywards. Last year’s 23p per share reward is predicted to rise to 24p in the current period, resulting in a monster 6.1% yield.

And with earnings expected to stabilise in fiscal 2019 — a 1% rise is currently predicted — the number crunchers are estimating further dividend growth, to 25p. As a consequence Royal Mail’s yield steps to an even-more formidable 6.3%.

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Royston Wild 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.