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Best shares to buy! This FTSE 100 stock is too cheap to ignore

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Distribution and outsourcing group Bunzl (LSE: BNZL) regularly features on my list of best shares to buy, so I was interested to see its share price has dipped. Right now, the FTSE 100 stock trades at just 13.9 times earnings, cheap by its standards. I see this as an opportunity to buy it, then hold for the long term and beyond. 

I have typically seen Bunzl as one of the best growth shares to buy, but today’s 3.9% yield makes it look like a tempting income stock too. The pandemic interrupted its proud record of dividend growth, but management quickly resumed shareholder payouts.

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You won’t find Bunzl’s products or services in the shops, and I suspect many private investors overlook its potential as a result. It sells groceries, food services, safety wear and cleaning products to companies, allowing them to cut costs, free up working capital, and simplify admin.

One of the best shares to buy now?

The Bunzl share price enjoyed an initial lift from the pandemic, because it also supplies ‘healthcare consumables’, including sanitisers, gloves and face shields. Covid-19 related orders totalled around £550m last year.

If vaccines see off Covid, this demand may fade. This is a worry (for Bunzl) since sales of other products and services fell 5%. On the other hand, these may enjoy a revival if lockdowns ease. It seems to win either way. That is another reason why I see this is one of the best shares right now, and would buy despite current uncertainties.

After excluding larger Covid-19 related orders, the group still expects a “moderate decline” in second-half organic revenue growth. 

So why do I still think this is a great to buy now? I think Bunzl’s acquisition-led global growth strategy is a winner. It offers global diversification, strong cash flows and a robust balance sheet. Today’s low entry valuation is too tempting for this long-term fan to ignore.

I’m also a fan of global information services company Experian (LSE: EXPN), it is expensive trading at a thumping 37.2 earnings. I still think it is one of the best shares on the FTSE 100, but would be reluctant to buy today.

This FTSE 100 stock is a bit pricey

The Experian share price has more than doubled over five years. It has been climbing in recent months, after posting a 14% jump in annual profits to $1.08bn, despite Covid. Statutory revenue edged up 4% to $5.37bn.

Banks worldwide rely on Experian’s massive consumer database to make lending decisions, and around 90% renew their contracts each year. It has two large rivals in Equifax and TransUnion, but high barriers to entry will deter others, maintaining pricing power.

Experian could take a hit if the pandemic drags on or property prices crash, and demand for credit falls. While I don’t see that as a major threat, it may not be the best share to buy at at today’s pricey valuation. I would rather pop it on my watch list and buy if it dips.

I'd also consider this stock.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Bunzl and Experian. 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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