In terms of dividend shares, I’m extra excited by constant returns than thrilling companies and sporadic payouts. Excessive yields are most of the time a pink flag, for me at the least. Nevertheless, it’s at all times price noting that dividends are by no means assured.

With that in thoughts, two constant shares I reckon buyers ought to be taking a better have a look at are Bunzl (LSE: BNZL) and Howden Joinery Group (LSE: HWDN). Right here’s why!

What they do

Bunzl is a enterprise with roots stretching again over 100 years. Though it has modified through the years, the corporate now focuses on meals package deal supply and cleansing merchandise.

Howden is likely one of the UK’s largest kitchen manufacturing and joinery specialists with a large presence throughout the nation. It sells its merchandise to commerce clients, in addition to direct to shoppers via its many depot areas.

Bunzl’s funding case

Diving straight into the topic of returns, Bunzl at the moment provides a dividend yield of two.3%. This can be a nice instance of a yield that doesn’t get my pulse racing. Nevertheless, what does excite me is the agency’s monitor document, because it has raised annual dividends for dividends.

In terms of passive earnings, secure and regular will increase excite me greater than sporadic payouts with excessive yields. Nevertheless, it’s price mentioning that previous efficiency is rarely a assure of the longer term.

One among Bunzl’s largest attracts for me is its measurement, scale, and expertise. With a presence in over 30 international locations, and sticky relationships with the vast majority of its clients, it possesses defensive talents, in the event you ask me. It’s because the merchandise it provides are necessities. This has allowed the enterprise to generate regular earnings and reward shareholders for years.

From a bearish view, Bunzl’s efficiency has been harm previously, and lately too, primarily based on a buying and selling report launched final week, because of financial turbulence. Greater inflation and weaker client confidence has led to a drop in spending throughout its merchandise. That is one thing I’d control, because it might harm potential returns sooner or later.

Howden’s funding case

The enterprise has grown quietly into one of many largest suppliers of its type through the years. This has allowed it to return money to shareholders constantly. The shares at the moment provide a dividend yield of two.3%.

Like Bunzl, Howden has a very good monitor document of payouts lately. It has elevated its dividend per share for the previous 4 years. Moreover, earlier than the pandemic, it was on an eight-year streak.

When it comes to trying ahead, Howden has developed a stellar popularity within the commerce, which has allowed it to develop earnings. As a result of present housing scarcity within the UK, I reckon the enterprise is primed to proceed rising, which ought to in principle, enhance earnings, and investor returns.

The pure threat for Howden is being on the mercy of inflation linked to the important uncooked supplies it must manufacture its merchandise. Greater prices might lead to tighter margins and smaller dividends. Nevertheless, with the present housing scarcity talked about, and recognition of its merchandise and huge presence, this isn’t one thing I’m too involved about.