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Compass Points the Way to Greater Growth, Especially in the USA

By Malcolm Stacey | Monday 4 December 2017

Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Hello, Share Scramblers. We’ve all found to our cost that just because a company is big enough to be in the Footsie, doesn’t mean it’s any more immune than the rest from disaster. But some shares still seem more reliable than others.

One such Footsie member is Compass (CPG), one of the world’s biggest caterers. It has a huge footprint in the mass-feeding world, with its toe in office canteens, entertainment centres, sports venues, schools, hospitals and so on.

Since I last commended Compass on this whizzing website, the share price has not exactly soared. But, with new management planned, the times may be a-changing.

We all know that USA shares are rocketing head of British ones. This means we should consider buying stocks in companies with a big American market. Well, you can’t do much better in this direction than to support Compass. Nearly sixth-tenths of its global business is in North America. And its operating profit in that part of the world was up by 7.6% in the first half of this year.

If you are interested in dividends, and who isn’t, as bank interest continues to wallow, then Compass is also worth considering. The yield I have is only 2.25%, but when a company makes as much cash as Compass you may grab some special pay-outs in the next few years.

I’ve read that Compass’s growth is forecast to rise between 5 and 6% for the rest of 2017. And when a company grows, so should the share price. The P/E of 21 does not indicate an obvious bargain, but that doesn’t matter so much when there's growth on the cards.

This is one of those shares which won’t set your portfolio on fire, but which might turn out to be a measure of security to hedge against catastrophe elsewhere (though no share is ever secure, of course).

And now point yourself in the direction of the Punter’s Return.

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