I’d buy shares in this FTSE 100 dividend champion right now and hold for 10 years

first_imgI’d buy shares in this FTSE 100 dividend champion right now and hold for 10 years Kevin Godbold | Thursday, 27th February, 2020 | More on: MNDI See all posts by Kevin Godbold There’s a little wobble in the full-year figures from FTSE 100 paper and packaging supplier Mondi (LSE: MNDI) today. In fairness, the share price has been signalling weakness by drifting generally lower since the summer of 2018. Nevertheless, in the report, the directors retain their optimism about the company’s future.Revenue came in 3% down on last year’s figure and underlying earnings per shares dipped by 10%. But the all-important number for cash from operations only ticked down by 1%. And net debt fell by 0.6%. I find the cash performance encouraging, and the directors slapped 9% on the total dividend for the year, which suggests a positive view about the outlook.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…A great record on dividendsOne of the things I like most about Mondi is the dividend has risen by just over 100% over five years. That’s a great record of shareholder returns, and it’s been backed up with a strong, steady and generally rising stream of incoming cash flow. Indeed, cash flow has been robust support for earnings over an extended period. I reckon there’s a large defensive element to the company’s business.Chief executive designate Andrew King said in the report he thinks Mondi delivered a robust performance in 2019 “against a backdrop of challenging trading conditions.” And that’s a similar message to the one I reported on earlier today from the company’s smaller peer Macfarlane (which is another stock I’m tempted to buy right now).King reckons Mondi controlled costs well over the year and saw a good contribution from “acquisitions and capital investment projects.”  Luckily, that “partially offset” weakness from the firm’s key pulp and paper grades.And the company is carrying out a capital investment programme designed to deliver growth and increase competitiveness. One example of that is the rebuilding of the Ruzomberok pulp mill in Slovakia, which the firm commissioned during the second half of the year.There’s also an ongoing project to invest in a new 300,000 tonne “kraft top white machine” on the site, along with “major” capital investment projects at the Syktyvkar mill in Russia and the Steti mill in Czech Republic.Well-placed in its marketsThey’re not the only reinvestment projects Mondi is pursuing. And I reckon the way the firm ploughs money back into the business will help keep it well-placed in its markets to drive that ongoing cash flow and power the progressive dividend policy in the years ahead.Looking ahead, King is “confident” about the structural growth drivers in the company’s packaging sectors, although he reckons heightened macro-economic uncertainties will likely continue to affect markets in the short term.The current year, for example, has started off with lower prices across the company’s key paper grades. But King is seeing indicators of “stability” in pricing in “certain segments.”The short-term outlook is a little hazy, but that could be the best time to pick up some of the company’s shares. At the recent price of 1,625p, the stock supports a dividend yield of around 4.3%, which I see as attractive. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Image source: Getty Images. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.center_img Simply click below to discover how you can take advantage of this. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. “This Stock Could Be Like Buying Amazon in 1997” Our 6 ‘Best Buys Now’ Shares Kevin Godbold has no position in any share 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. Enter Your Email Addresslast_img read more

Forget a Cash ISA, I say this is the perfect time to buy FTSE 100 shares

first_img Alan Oscroft | Friday, 19th June, 2020 Forget a Cash ISA, I say this is the perfect time to buy FTSE 100 shares “This Stock Could Be Like Buying Amazon in 1997” The UK inflation rate dropped to just 0.5% in May, and it could go even lower. I’d even say there’s a possibility of deflation, which would be a very rare phenomenon. In a low-inflation economic environment, should you invest in a Cash ISA? I’m going to explain why I think that’s a bad idea, and why the time is ripe for investing in FTSE 100 shares instead.Cash ISA rates fallingWith UK base rates super low too, the best interest you can hope to get from a standard instant access Cash ISA right now is around 0.9%. You can do better if you tie your cash up for a fixed period. But you’re looking at a five-year commitment to earn just 1.2% per year. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…My usual complaint about a Cash ISA rather than FTSE 100 shares is that interest rates have been below inflation. Ironically, inflation dropping to 0.5% means today’s Cash ISA rates are actually positive in real terms. But that’s almost certainly not going to last.That 0.5% inflation rate is clearly an anomaly, a result of the Covid-19 lockdown. But as we see the lockdown increasingly eased, economic activity will improve. And even if inflation should dip even lower in the short term, it will surely get back to its long-term levels before too long. In fact, the Bank of England is tasked with achieving exactly that.FTSE 100 shares doing worseEven if current interest rates are unattractive, a top Cash ISAs will have easily beaten FTSE 100 shares so far this year. Right now, the FTSE 100 is sitting on a loss of around 17% since the start of 2020. Usually, when share prices dip, we still have dividends to keep us going. But many companies have slashed their dividends too.So why do I recommend a Stocks & Shares ISA, invested in FTSE 100 companies, ahead of a Cash ISA? And why especially right now when Cash ISAs are winning?Past crashesTo explain why, I’m going to look back at what happens after stock market crashes. This year’s lockdown-triggered crash took the FTSE down below 5,000 points. But since that low, it’s climbed by 25%.The previous low was back in February 2016, and in the following 12 months the FTSE 100 climbed by 32%. Looking further back to the banking crisis, the FTSE 100 bottomed out in March 2009. Over the next 12 months, the index rose by 57%. Those are all big gains that Cash ISA investors would have missed.Incidentally, FTSE 100 shares are now 80% higher than that 2009 low. And we’ve had a decade of dividends too, which will take it well above a doubling. Over that timescale, that’s poor by FTSE 100 standards. But it still wipes the floor with a decade of Cash ISA interest.FTSE 100 shares vs Cash ISAThat last bit is what really matters, that FTSE 100 shares beat a Cash ISA over the long term. I reckon they have to really, as companies are the only things that generate actual new wealth. And there’s really nowhere else a Cash ISA can ultimately get money from to pay its watered-down interest.And it really does look like moving to the apparent safety of a Cash ISA from FTSE 100 shares during times of stock market crisis is the exact opposite of the best move. Image source: Getty Images. Simply click below to discover how you can take advantage of this. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee.center_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Views expressed 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. Our 6 ‘Best Buys Now’ Shares See all posts by Alan Oscroft Enter Your Email Addresslast_img read more