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Forget Bitcoin and gold! I’d buy this FTSE 100 dividend stock before Brexit

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With Brexit uncertainty at new highs, where should you be investing your cash? Alternative assets such as Bitcoin and gold are popular with some investors. But personally, I’m not convinced.

The gold price is at a six-year high, and I’ve never been keen on assets that provide no income and cannot grow. Bitcoin is even worse, in my view. Its future looks uncertain to me and, unlike gold, Bitcoin is not widely accepted.

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I think there are much better — and safer — opportunities in the stock market. Today, I want to look at two stocks I’d consider buying ahead of Brexit.

The most boring stock ever?

FTSE 100 stock Bunzl (LSE: BNZL) is probably the most boring company in the big-cap index. But for long-term shareholders, it’s also been one of the most profitable. Bunzl supplies thousands of sundry consumable items such as cleaning products to business customers all over the world. It’s grown steadily by acquiring small, local competitors. The share price has risen by 250% since September 2009. Dividends have doubled since 2011.

3 reasons I’d buy

Why would I buy Bunzl ahead of Brexit? One attraction is this is a truly global business. Any disruption in the UK would be little more than a footnote in the group’s accounts. A second attraction is the products supplied by the group are essential. Companies can’t function without the thousands of small, consumable items it supplies. The final reason I’d buy is that this group’s performance over many years suggests to me it’s well run, highly profitable, and has a strong focus on shareholder returns.

BNZL shares aren’t obviously cheap, on 15 times forecast earnings and with a 2.5% yield. But this is a business that hasn’t put a foot wrong while I’ve been following it. I believe it’s one of the safest stocks money can buy.

Another essential service

One company I’ve already bought for my portfolio is bus and train operator Go-Ahead Group (LSE: GOG). In my view, better public transport is the only way to solve the congestion and pollution problems on our roads. Electric cars alone aren’t the answer — they still require the same amount of space.

The Go-Ahead share price is up by 3% at the time of writing, after the company reported profits ahead of expectations and issued a confident outlook statement. But I should point out the news wasn’t all good.

Although sales rose by 10% to £3,807.1m last year, the group’s underlying pre-tax profit fell 7.6% to £113.8m. The main reason for this decline was the loss of the London Midland rail franchise in 2017. This caused profits from rail operations to fall from £44.5m to just £25.4m.

The big picture

I don’t see this one-off loss as a major concern. Looking at the group as a whole, I can see free cash flow rose from £57.7m to £74.1m last year, improving dividend cover. Net debt fell and the group’s bus operations continued to provide stable profits.

I see Go-Ahead as a good way to profit from the continued long-term growth of the UK’s major cities. Alongside this, the group’s international operations provide some welcome diversity, helping to offset UK political risk.

With the GOG shares trading on 12 times forecast earnings and offering a yield of nearly 5%, I remain a long-term buyer.

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Roland Head owns shares of Go-Ahead Group. 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.

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