Two FTSE 100 shares smashed it in September but still look good value. Should I buy them today?
Shares in international sports betting and gambling company Entain (LSE: ENT) have jumped 18.38% over the last month. However, they’re still down 45.3% over one year.
This tells me two things. First, Entain has taken a real beating until very recently. Second, it has plenty of scope to make up lost ground.
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Can Entain shares carry on growing at this speed?
The Entain share price got a real boost on 8 August, after the board upgraded full-year guidance following a strong second quarter. The Euros football tournament helped, as results went in Entain’s favour. First-half net gaming revenues jumping 8% to £2.6bn. Sadly for Entain, there isn’t a major football tournament every month. So there’s a risk that second-half earnings could disappoint.
The group is still recovering from former CEO Jette Nygaard-Andersen’s acquisition-fuelled dash for growth, which included its 50:50 BetMGM joint venture with MGM Resorts International.
Gaming industry veteran Gavin Isaacs, who took charge on 2 September, is expected to steady things. Entain needs to knuckle down to the hard work of squeezing out the revenues. But they seem to be heading in the right direction, as this chart shows.
Chart by TradingView
Entain doesn’t look expensive trading at 14.45 times earnings. The dividend yield of 2.82% has room to grow. With a huge US gaming market to aim for, I’m optimistic about its prospects. Yet I think the shares might idle following the recent spurt. Gambling is a controversial area, with the constant threat of tougher regulation. I’ll still buy Entain when I have the cash, though.
Bunzl offers me both dividends and growth
I’m a long-term fan of unsung FTSE hero Bunzl (LSE: BNZL). Most people have never heard of the company. Nor have many investors. Yet it has a terrific track record of delivering dividends and share price growth.
Bunzl supplies items to other firms, everything from disposable coffee cups to cleaning materials, bandages, and rubber gloves for hospitals. Boring, but profitable.
The Bunzl share price jumped 12.19% last month after publishing warmly received half-year results on 27 August. Revenues slipped 3.3% to £5.71bn but investors chose to focus on a 3.9% increase in adjusted operating profit to £455.5m.
Better still, the board upgraded full-year guidance and launched a £250m share buyback with another £200m to follow.
Bunzl’s shares are up 24.63% over one year and 72.51% over five. I’m kicking myself for failing to buy the stock when I took a shine to it yonks ago.
While the yield is small at 1.92%, the board has increased dividends for 31 consecutive years. It’s a true Dividend Aristocrat. Last week, the board hiked the interim payout by an impressive 10.4% to 20.1p per share.
Bunzl has grown through acquisitions and completed another seven in the year to August, with a total committed spend exceeding £650m.
It’s not that cheap, though, trading at 18.69 times earnings. Also, the business is exposed to cyclical sectors of the economy, which could struggle if the US falls into recession.
However, I expect Bunzl to carry on climbing over the long term and only wish I had the money to buy it right now. I will buy it, though.
