Fortunes Have Been Made From These Low-Risk Shares

Wahey! It seems summer is finally here… with blue skies and blazing sunshine prompting a mad dash for dodgy shorts and emergency aftersun if the Fool office is anything to go by.

The super weather may have sparked a mad dash back into shares, too, as I see the FTSE has surged 500 points following last month’s ‘correction’. In fact, an incredible 192 points were gained during just one day last week.

I did say a rebound could occur as quickly as June’s falls… and that you wouldn’t want to be sitting nervously on the sidelines then, would you?

So… 7,000 here we come – perhaps! A celebratory office conga – complete with dodgy shorts – would round off the summer very nicely.

Correction, what correction? These stocks have trounced the market

Actually, I bet some investors have been celebrating in the sunshine already. You see, despite June’s correction and all the other market ups and downs, some shares have been recently hitting fresh all-time highs.

Now both you and I could have easily bought these tip-top shares some years ago. I know this because the companies involved aren’t small, obscure, high-risk names that only the most sophisticated, knowledgeable and experienced stock-pickers would ever dig up.

Instead, the companies involved are all straightforward, dull businesses that – on the face of it – offer little prospect of excitement or growth. And yet, fortunes have been made by sensible long-term investors holding these low-risk shares.

Let me reveal just three of the stocks in question.

Quite possibly the market’s most boring blue chip

Bunzl (LSE: BNZL) is quite possibly the most boring share within the FTSE 100 index.

The group tries to sex up what it does by describing itself as “providing outsourcing solutions and service-oriented distribution”. But in reality, Bunzl sells items such as plastic bags, paper napkins, toilet mops and safety goggles.

Nonetheless, this company has been a wonderful performer for anyone that dislikes racy businesses and portfolio worries. Indeed, anyone buying at the 492p low a few years ago would now be sitting on a fat 179% profit.

What’s more, Bunzl’s dividend never missed a beat during the financial crisis, with the payout rising from 19p to 28p per share between 2007 and 2012.

One of the two certainties in life provides a 202% profit

Now to what must surely be the market’s most predictable sector… funerals.

Indeed, the last five years has seen the number of deaths in Britain vary only slightly between 539,000 and 553,000 per annum. It’s meant steady trade for Dignity (LSE: DTY), the country’s largest funeral group that owns more than 600 funeral directors.

As you’d expect, Dignity has been a very reliable performer for anyone that enjoys low-risk businesses and ultra-predictable returns. Indeed, underlying earnings per share have nearly doubled since 2007 as the group expanded its network and lifted its prices.

And anyone smart to enough to buy at the 496p low a few years ago would now be sitting on a superb 202% profit.

This is why some people love gas bills

Completing the trio is Paypoint (LSE: PAY), which you might say is a business in decline. That’s because the firm processes cash payments for household bills at corner shops and convenience stores. Surely that line of work is dying out as everyone these days uses direct debit…

…well, perhaps not. In fact, between 2007 and 2013, the number of transactions on Paypoint’s networks jumped 50% while the total value of the transactions surged 166%.

The performance has meant Paypoint has been an astounding performer for anyone that likes the regularity of people paying gas bills. In fact, anyone that spotted the 236p low a few years ago would now be sitting on an incredible 358% profit.

Lounging around the pool and grinning at their huge gains

You won’t find shareholders of Bunzl, Dignity and Paypoint worrying about recent market falls and wondering whether the global economy is headed for further trouble.

That’s because they’ve backed simple companies that offer basic services and products that people will always need, whatever happens to interest rates, the Chinese economy or the price of gold.

Indeed, the dependability of such companies – rather than their business growth rates – has been recognised by the market through some enormous, FTSE-thumping returns.

As I say, I bet the holders of these shares have been celebrating in the sunshine already…

…in fact, I can imagine them now, lounging around the pool and grinning at how their shares have hit all-time highs and how they’ve enjoyed such huge gains from such low-risk companies.

Fancy joining them poolside this summer? Well, the cleverest stock-pickers the Fool has ever employed have recommended many predictable, lower-risk shares for you to choose from.

The names of the shares are available to members of Motley Fool Share Advisor and – similar to Bunzl, Dignity and Paypoint – would also seem to be straightforward, dull businesses that, on the face of it, offer little prospect of excitement or growth…

Of course, I’d like to think these recommendations will soon be hitting fresh highs and delivering handsome gains to sensible investors like you.

You can join Motley Fool Share Advisor and see every share the Fool experts are recommending by clicking here right now.

> Maynard does not own shares in any of the companies mentioned. The Motley Fool owns shares in Paypoint.