The Bunzl (LSE:BNZL) share price has risen by a whopping 88% over the previous decade. And whereas it’s down for the reason that begin of 2024, the corporate is staging a comeback as gross sales and margins present indicators of restoration.

I’m in search of one of the best passive revenue shares to purchase in July. And Bunzl — with its 31 straight years of dividend progress — is close to the highest of my purchasing listing.

The truth is, following a superb buying and selling assertion immediately (27 June), I’ll lastly be about to drag the set off. Right here’s why.

A secure performer

Help companies big Bunzl sells a variety of important merchandise to quite a lot of sectors throughout the globe. This consists of meals packaging to supermarkets, disinfectant to cleansing companies, gloves to medical professionals, and onerous hards to development firms.

Put merely, its provision of on a regular basis items and companies helps the world go spherical. Consequently, earnings are typically secure in any respect factors of the financial cycle, which in flip provides Bunzl the power and the boldness to ship that long-term dividend progress I discussed above.

Revenue improve

However the firm hasn’t had all of it its personal far more just lately. Weak buying and selling in North America has impacted revenues and margins, and this stays a menace if rates of interest fail to meaningfully backtrack from present ranges.

Bunzl confirmed immediately that gross sales are more likely to have dipped 3% to 4% within the first half, or 0% to 1% at secure currencies. It stated that “volume reductions and deflation in our US business” will seemingly drive revenues decrease.

Nevertheless, a pointy uptick in working margins helps to offset this downside. Certainly, Bunzl stated margins are actually anticipated to beat 2023’s ranges, which in flip prompted the agency to boost its earnings forecasts for the complete 12 months.

It stated that efficient margin administration and the advantage of acquisitions imply that “good margin growth is expected in North America in the first half of the year and very strong margin growth in the UK & Ireland and Rest of the World.”

Bunzl additionally stated it now expects to announce “robust revenue growth” at fixed currencies for the complete 12 months.

Dividend progress

So what dooes this replace imply for future dividends? Nicely, Metropolis analysts had been anticipating payouts to proceed rising earlier than Thursday’s replace, as proven within the desk above. As we speak’s information is certain to strengthen their bullish estimates.

On the draw back, brokers suppose dividends will develop at a extra modest price than in earlier years. The payouts on Bunzl shares have risen at a compound price of round 9% since 1992.

Nonetheless, dividend progress is anticipated to outpace that of the broader FTSE 100. For example, AJ Bell tasks a modest 2.3% rise in money rewards (together with particular dividends) for 2024. That is lower than half the expansion price brokers anticipate for Bunzl’s dividends this 12 months.

And if the enterprise can hold its current momentum going, analysts may really improve their dividend forecasts for the short-to-medium time period. I feel dividend chasers ought to give Bunzl shares an in depth look proper now.