Quality assurance

As a quick introduction, Intertek is a quality assurance business that provides its services to a number of industries and businesses throughout the world. In simple terms, it helps firms with assurance, testing, inspection, and certification to its customers on their products which they then bring to market. Product testing and quality assurance is a key part of product development.

So what’s happening with Intertek shares currently? Well, as I write, they’re trading for 4,207p. At this time last year, the stock was trading for 5,132p, which equates to a 18% decline over a 12-month period.

A FTSE 100 stock with risks

Firstly, despite the fact that Intertek shares have been falling, they look a bit pricey to me at current levels. They’re on a price-to-earnings ratio of 22. The main thought that springs to my mind here is that recovery could already be priced in. Should I wait and see if the shares fall further before deciding to make my move? I need to take a look at other fundamentals to help me decide if I should buy the shares at current levels.

Another risk of buying Intertek shares is the firm’s propensity for acquisitions. Acquisitions are generally positive to boost growth and performance, but there is always a chance they can be costly mistakes. Sometimes, firms can overpay for an acquisition, which can affect a balance sheet, returns, and investor sentiment. I will keep an eye on Intertek’s acquisitions going forward.

The positives and what I’m doing now

So to the positives then. Firstly, I am buoyed by the fact that Intertek is a global business with a long history of trading, performance, growth, and building relationships. At the end of the day, all the products we use on a day-to-day basis require assurance, testing, and certification. This essential requirement should benefit Intertek for years to come, in my opinion.

Next, I view Intertek as a great FTSE 100 stock to boost my passive income stream through dividends. At current levels, the shares’ dividend yield stands at 2.5%. Despite being lower than the index average, the consistency of the company’s dividend payouts and record are positive. I am aware that dividends are not guaranteed, however.

Finally, performance underpins dividend payouts and Intertek has a good track record of performance. I am aware that past performance is not a guarantee of the future, however. Looking back, I can see Intertek has a consistent record of revenue and profit generation across the past four years.

Overall, I believe Intertek is a quality FTSE 100 stock. This is perhaps why its current P/E ratio is slightly high. Warren Buffett once said, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price”. I believe this is the case with Intertek, which is why I would add the shares to my portfolio and hold it for the long term.

Investing

Investment managers are suffering from funds outflows right now, with investors shunning risk. But I wasn’t expecting to see such a big profit fall at Jupiter Fund Management (LSE: JUP).

Underlying pre-tax profit slumped to £29.7m, from £78.2m in the first half of 2021. But the Jupiter share price is down only 5% at the time of writing. Maybe investors already feared the worst, having seen a 55% drop over the past 12 months.

Profits suffered from reduction in performance-related fees, which is hardly surprising. Excluding net performance fees, the profit dip looked less painful, down from £79.8m to £53.9m.

This does show the risks of investing in fund managers. But if I want long-term growth shares, I know I have to expect it from time to time.

Moving

Turning to another sector under pressure, I see the Rightmove (LSE: RMV) share price has also fallen 55% in the past 12 months.

After Friday’s H1 results, the shares dipped another percent or so. The outlook for the estate agent business in the second half of the year might be a bit cloudy. But the first half, at least, saw a 9% increase in revenue with underlying earnings per share up 7%.

The company boosted its interim dividend by 10%, which I’d say shows confidence. And Rightmove has been returning cash through share buybacks too.

Rightmove’s profits have been erratic in recent years. But forecasters do see earnings growing, if slowly, over the next few years. Is this another growth candidate to buy while it’s down?

Testing

To complete a trio of fallers on the day, I turn to Intertek (LSE: ITRK). Shares in the testing and inspection specialist are down 5% as I write, having fallen 43% over 12 months.

Intertek recorded a 9.5% rise in revenue at constant exchange rates, with like-for-like revenue up 4.9%. Adjusted operating profit increased by 4% too, and I’m seeing decent results all round here.

So why isn’t the market impressed? It might be because the company didn’t increase its interim dividend, maintaining it at last year’s 34.3p. But Intertek is not really an income stock anyway, and analysts are again predicting continued earnings growth over the next couple of years.

On the same day, Intertek announced the acquisition of Clean Energy Associates, described as “a market-leading independent provider of quality assurance, supply chain traceability and technical services to the fast-growing solar energy and energy storage sectors.”

Growth?

Rightmove and Intertek are both on relatively lofty valuations, after their share price falls. So that might well hold back their share prices in the shorter term. But I can’t help thinking I’m looking at a couple of long-term growth opportunities here.

Jupiter, meanwhile, is one I’ve always liked. But I do expect to see share price volatility over the years.

What is a “beaten down” stock?

There is no singular definition of a beaten down stock. I believe it is one that may have lost value in recent times in respect of share price or the share price may not have increased as much as expected. Furthermore, investor sentiment may have dampened too.

I believe some beaten down stocks have long-term potential upside for returns. This potential derives from having better fundamentals than other stocks with comparable share prices. The share price issues and investor sentiment in any beaten down stock are usually short to medium term issues in my opinion.

Many famous investors, such as Warren Buffett for example, will tell you the best way to create wealth is buy low and sell high. I believe this means sometimes going against the grain and considering stocks that may look on the surface as if they are in trouble.

I must note that not every beaten down stock is a gem in the rough that will blossom over time. Some stocks are on a downward trend due to weakening fundamentals. These fundamentals include a firm’s balance sheet, performance track record, the market it operates in as well the general economy and said business’ place in the current economy. But if the fundamentals are good, I believe there is a chance of a good return on investment (ROI) for my portfolio.

FTSE 100 pharma giant

AstraZeneca (LSE:AZN) is one pick that I consider beaten down. The pharma firm is one of the biggest in the the world and focuses on creating life changing medicines. The stock has not moved as much as expected in the past 12 months in my opinion.

As I write, shares are trading for 8,910p. This time last year, shares were trading for 8,470p, which is only a 5% return. In March 2021, shares fell as low as 6,794p. This share price volatility and recent investor sentiment lead me to class AstraZeneca as a FTSE 100 beaten down stock right now.

I believe AstraZeneca’s disappointing performance in the past 12 months has a lot to do with the fortunes of the Covid-19 vaccine it produced. AstraZeneca was the first company to release a successful vaccine but it rapidly lost this market to competitors such as Pfizer. AstraZeneca’s vaccine has been plagued with issues that have affected investor sentiment. As well as supply issues, a few governments advised against over 65-year-olds having the vaccine due to their fear of a lack of efficacy.

AstraZeneca is still one of the largest pharmaceutical firms and has a lot going for it. I think recent announcements could boost investor sentiment and performance. One of these announcements was regarding a breakthrough in an anti-cancer drug. The cancer drug market is huge, therefore AZN’s breakthrough could offer it a significant revenue boost.

As well as this, AZN continues to invest heavily in tech for vaccine development. It struck a deal with VaxEquity, a firm founded by Imperial College London, that will see AZN reap the benefits of the startup’s RNA technology. This move could be lucrative as it could beat the RNA technology being used by competitors Moderna and Pfizer.

Looking at some of the fundamentals I mentioned earlier, AstraZeneca has a pretty solid balance sheet in my eyes. It has good cash flows and lots of cash, which is good for investment, research and development (R&D), and ensuring operations continue to run smoothly.

AstraZeneca’s performance has been solid over the past few years too. Revenue has increased year on year for the past four years while profit has increased over the past three years. I understand past performance is not a guarantee of the future but I use it as a gauge nevertheless.

AstraZeneca has a propensity to acquire other businesses that boost its own offering. I do like this but it can be a risk too. Completing many acquisitions can be costly and debt levels are beginning to creep up for AstraZeneca. Furthermore, competition is rife in the pharma market and this will no doubt affect AZN as it has before.

FTSE 100 quality assurance pick

Intertek Group (LSE:ITRK) is a quality assurance provider to a multitude of industries worldwide. It offers assurance, testing, inspection, and certification services to its customers. Intertek is viewed as an industry leader and has a huge footprint with close to 44,000 employees across 1,000 locations in over 100 countries. All products and services that firms sell must be tested vigorously and this is where Intertek comes in. I believe it is an overlooked share that have excellent long-term potential. I think it has been beaten down somewhat in the past year or so.

As I write, shares are trading for 4,935p. This time last year, shares were trading for 6,200p, which is a 25% decrease. Despite the poor share price performance, I believe Intertek could be a good FTSE 100 option for my portfolio.

One tell-tale sign for me is that insiders are buying shares. Over the past year, one of the biggest insider share purchases, worth £537,000, has been by company CEO and director Andre Pierre. Insider buying is not a sure fire way of determining that a stock will go up but I believe it is a good signal. I believe it means that those who know most about the stock are confident in it. Furthermore, it means management’s and shareholders’ interests are even more aligned.

In addition to insider buying, I am buoyed by Intertek’s recent announcements. For example, it recently announced a lucrative deal with Globizz, which would see it provide regulatory services for medical devices in the US and Japan. Japan and the US account for a lot of the total medical devices market in total. This should boost its performance and investor sentiment. Furthermore, Intertek announced its first-ever Canadian lab had received approval. This will boost its profile and footprint as well.

Looking at Intertek’s balance sheet, it has positive cash flows, like AstraZeneca, and can continue to expand and acquire other businesses to enhance its offering. Acquisitions could be a risk, however. If it overpays, this could affect financials and investor sentiment as well.

Furthermore, Intertek was severely impacted by Covid-19 and the economic downturn. Economic fragility can hurt companies that offer business services, therefore this is a credible risk for Intertek and its investment viability. 

Achieving a reliable passive income means finding businesses that can generate steady growth over many years, while generating plenty of cash for dividends. Not all popular dividend stocks fit this description. For example, the big FTSE 100 miners are paying big dividends now, but they all slashed their payouts five years ago, when commodity prices crashed.

The three companies I’m going to look at today are all shares I own in my portfolio. All three have long histories of dividend growth and strong financial metrics. I reckon they’re among the best passive income ideas in today’s market.

I’ve snapped up this 6.6% yield

I recently added more Legal & General Group (LSE: LGEN) shares to my ISA portfolio. This FTSE 100 financial giant is one of the safest high-yield stocks on the market, in my view.

Legal & General’s business model involves investing huge amounts of cash in long-term assets, including stocks, renewable energy assets, commercial property, and rental housing. At the end of June, L&G had £1.3trn of assets under management.

The income from these operations is then used to support the group’s life insurance and pensions businesses. A generous slice of surplus cash is returned to shareholders each year and the dividend has doubled since 2013.

Indeed, except for a cut during the 2008 financial crisis, Legal & General’s dividend has grown continuously for more than 30 years.

Of course, a long dividend history does not guarantee that dividend payments will continue to rise in the future. But I think it’s strong evidence that this business is run with a focus on cash generation and shareholder returns. I reckon that’s a good start for a passive income stock.

Quality passive income

There are other insurance companies out there with attractive dividend yields. So why have I chosen Legal & General?

After following this business and other similar stocks for many years, I’ve noticed that L&G’s business model is consistently more profitable than UK rivals such as Aviva. I also like Legal & General’s clear and focused financial reporting, which emphasises information that’s important to me, such as cash generation and return on equity.

The main risk I can see is that Legal & General’s operations could become so large, complex, and hard to manage that — at some point — returns will fall below expectations. A situation like this could take years to put right, during which shareholders might see their dividends (and shares) fall.

Personally, I’m willing to accept this risk. Legal & General shares currently trade on eight times forecast earnings, with a 6.6% dividend yield. I’ve been buying at this level and believe this passive income stock looks too cheap.

We are all customers

Find me a household in the UK — or most other countries — which doesn’t have any Unilever (LSE: ULVR) products in it. I know my home has several. I’m pretty sure that yours probably does too.

As consumers, many of us are very loyal to our favourite brands, especially when they are frequent, low-cost purchases. The beauty of Unilever’s portfolio of branded consumer products is that they are regular, repeat buys.

Someone who prefers Persil washing powder, Ben & Jerry’s ice cream, or Hellmann’s mayonnaise probably doesn’t consider many alternatives. Unilever has 400 brands in 190 countries and its products are used daily by 2.5bn people. That’s the beauty of the group’s business model — billions of small, regular brand interactions.

The challenge for the group is that it must keep pace with changing consumer tastes, as well as more difficult issues like sustainability. As a heavy user of palm oil and plastics, for example, Unilever isn’t beyond criticism.

Another risk is that the prevalence of cheaper, own-branded products in supermarkets will gradually erode Unilever’s advantages. We all know that some of these own-brand items are just as good as the branded alternatives.

So far, Unilever has managed to stay ahead of the game. The group’s history stretches back 150 years and its dividend has not been cut for more than 50 years. Although the stock’s dividend yield is pretty average, at 3.7%, Unilever’s consistent high profit margins and steady growth mean that I think this is one of the safest dividends in the FTSE 100.

An overlooked passive income stock

Virtually all modern products and services must be certified in some way. They must do certain things and not do other things. If they’re misused, they must still be safe. And they must always be the same, however many are produced.

Who checks all of this and makes sure it happens? One of the leading players in the quality assurance and certification sector is FTSE 100 firm Intertek Group (LSE: ITRK). Intertek provides assurance, testing, inspection, and certification services to industries including aviation, chemicals, consumer goods, food, and transportation.

The group’s history goes back 130 years, but it came into existence in its current form in 2000, when it joined the FTSE 250. Back then, the shares traded at £4. Today, they change hands for over £50.

Intertek’s dividend has followed a similar upwards path. Payouts started at 8.1p per share in 2003. The dividend has never been cut and today stands at 106p per share.

Intertek isn’t as well-known as some the other two companies I’ve looked at today. But I think it ticks all the boxes for a high-quality passive income stock.

What could go wrong? One risk is that the main risk is that Intertek could fall behind rivals in offering new services, causing growth to slow. A second concern is that the group could start to overpay for acquisitions, reducing future returns.

So far, Intertek has avoided these problems. The group’s operating margin has averaged a healthy 15% in recent years. Profits are expected to bounce back in 2021, after the challenges of last year.

Although Intertek shares trade on 28 times forecast earnings and offer a modest 2% dividend yield, I think this is an excellent passive income stock. I’ve recently been buying the shares and intend to hold them for many years.

Intertek (LSE: ITRK) delivered first-half results Friday, and the share price fell 9% in early trading, before regaining a couple of percent.

But I don’t see much negative news from the quality assurance firm. There is a small decline in revenue, which fell a very modest 1%. That’s at actual currency exchange rates, and at constant rates we see a 4.8% gain.

Despite that dip, chief executive André Lacroix said: “The Group is on track to deliver a strong 2021 with robust like-for-like revenue growth, year on year margin progression and a strong free cashflow performance.”

Free cash flow dropped in the first half, by 13.6%, and that’s the only other negative I can see. But it’s been an unusual half as we still struggle to shake off Covid-19. And the rest of the figures look good to me. Pre-tax profit is up 23% (even at actual rates), and net debt tumbled by 33%.

I think there’s a risk with any company offering business services when we face economic fragility. But, overall, I’m considering buying Intertek in August.

FTSE 100 turnaround?

Informa (LSE: INF) is among the FTSE 100’s biggest daily falls on Friday. The business services company suffered during lockdown. And its ability to run conferences and exhibitions still largely eludes the business.

As a result, the Informa share price is still down 40% over the past two years, while the Footsie has recovered to a more modest 5% decline. But do I think that makes Informa a good buy now? And will I put it on my August watchlist?

Last time I looked, I decided to hold back from Informa. We had no real idea when Covid restrictions would end, or what would happen afterwards. But three months on, we’re now past so-called Freedom Day. And, fingers crossed, coronavirus cases are not so far showing the massive increases many feared. Informa is still very risky, but I think we could have better clarity by the end of August. This is another I’m watching.

Bricks and internet

Next (LSE: NXT) has come out of the pandemic strongly. It’s falling Friday like the other two. But the shares are up 30% over the past two years, easily beating the FTSE 100. Is bricks and mortar fashion retail regaining some lost popularity? Boohoo is set to start selling some of its Debenhams brands in retail stores in the Middle East. It seems plenty of people do like to browse in stores and properly inspect the goods.

Next has long been a success in internet trading anyway. Online sales accounted for 56% of the total in the first half of 2021. Admittedly, that was during Covid closure. But it does show Next’s capacity. The firm said on 21 July that “sales during the last eleven weeks have been materially ahead of our expectations and, as a result, we are increasing our profit guidance for the full year.“

Next shares might be looking a bit toppy. And we could see some profit-taking in the near term. But the stock remains on my August candidate’s list.

A great UK share for July

I’d happily invest my hard-earned cash in publishing giant Reach (LSE: RCH). The small-cap impressed the market last time it released trading details. I think a repeat performance could be in store when half-year results come in on 27 July.

A series of solid trading updates have helped the Reach share price rise 220% over the past year. It pays testament to the strong recovery in the advertising market and the publisher’s strong performances in the digital segment. Last time out in May, Reach said trading was ahead of expectations as digital revenues exploded 35% between January and April.

Reach’s share price may have increased sharply over the past year but, in my opinion, this UK share still looks terrifically-cheap, trading as it does on a forward price-to-earnings (P/E) ratio of around 8 times. I think it’s a great buy at these prices, despite the long-term threat that social media poses to traditional media outlets like these. City brokers think annual earnings here will rise 6% and 1% in 2021 and 2022 respectively.

A top FTSE 100 stock to buy

I think testing and certification business Intertek Group (LSE: ITRK) could prove a great buy for long-term investors this July. The FTSE 100 firm has fallen sharply in price in May, shaving gains made over the last 12 months to just 2%. I think this represents a terrific dip buying opportunity.

Intertek is scheduled to release interims of its own on 30 July. I’m expecting another solid set of trading numbers following the UK share’s strong January-April performance. Back then, the business said like-for-like sales were up 2.7% from the same 2020 period, with “broad-based momentum acceleration in March to April.”

I’m expecting this strong uptick to have continued as wider economic conditions improve. And I think this could lead to a positive re-rating of Intertek’s shares. I certainly think the UK share can expect demand for its quality assurance services to keep growing long into the future.

As it has said before, it should benefit from a multitude of significant structural growth drivers. These include “product variety, brand and supply chain expansion, product innovation and regulation, the growing demand for quality and sustainability from developed and emerging economies, the acceleration of e-commerce as a sales channel, and the increased corporate focus on risk.”

This is why City analysts think earnings at Intertek will rise 11% year-on-year in both 2021 and 2022. Today, the business trades on a forward price-to-earnings (P/E) ratio of 29 times, a high valuation that always leaves stocks in danger of sharp price falls if trading disappoints.

But this wouldn’t deter me from buying the UK share for my own investment portfolio.

House prices are booming and so is the housebuilding sector. I think one of the best shares to buy in this sector is also the biggest, Barratt Developments (LSE: BDEV). Earlier this month it increased full-year expectations, as it completed more homes and sold them for higher prices. Today’s high demand looks set to continue, even after the stamp duty holiday expires.

My worry is that rising building costs will eat into profits as commodity prices spiral, while supply chain issues could slow completions. Unemployment could rise once furlough ends, making buyers feel poorer.

However, with the new-build market underpinned by the government-backed Help to Buy scheme, Barratt’s valuation of just 10.7 times forecast earnings and forward yield of 3.7% (covered 2.4 times) look tempting to me.

This also looks like one of the best shares to buy

Prudential (LSE: PRU) also merits a place on my list of best FTSE 100 shares to buy, in part due to its low valuation of just 12.6 times forward earnings. The insurer is now focusing on fast-growing Asian and African markets, offering a vast untapped market of the middle-classes look to build and protect their wealth. The opportunity is huge.

Share price growth has been strong lately with the stock up 43% in a year. There’s a danger it may idle after posting such quick-fire growth, despite that low valuation. Another potential concern is that Prudential’s negligible dividend leaves investors relying on growth. A planned $3bn equity raise aimed at reducing debt and funding opportunities could dilute the stock.

Despite this, sales are accelerating both in Asia and Africa as they emerge from the pandemic, so there’s a vast opportunity for investors willing to be patient.

FTSE 100 growth stock

I also rate quality assurance provider Intertek Group (LSE: ITRK) as one of the best shares to buy on today’s FTSE 100. Yesterday, it reported “solid” revenue growth of 2.7% year-to-date, speeding up in March and April when revenues jumped 9.3%. Sales are still below 2019 levels, but the group remains on track to hit this year’s targets. 

My concern is that the stock is expensive, trading at 30.9 times earnings. Recent growth has been good, but not that good. Especially since the yield is just 1.8%.

However, I think it’s a strong long-term opportunity as Intertek seeks new outsourcing opportunities in the $250bn global quality assurance market. It should also benefit from the global push to net zero carbon as companies battle to prove supply chains are clean.

I don’t expect instant success, but I never do when hunting down the best shares to buy. Instead, I prefer to focus on the long-term story and that remains promising. With all three stocks, I might wait to buy them on the dips.

That doesn’t deter me from buying FTSE 100 stocks. Quite the opposite, in fact. UK shares have underperformed since the Brexit referendum more than four-and-half-years ago, but may now start to play catch-up. Brexit is largely settled and our vaccine programme is rolling out. The UK could suddenly find itself ahead of the game. Now wouldn’t that be a novel experience?

If I’m right, I think these two FTSE 100 stocks could do well in 2021 and beyond, and would consider adding them to my portfolio.

The UK should bounce back

BT Group (LSE: BT.A) has been staging a revival, its share price up more than a third in the past six months. Management is working hard on its modernisation programme, and recently delivered £352m in cost savings in just six months. This helped offset the Covid-19 impact, which hit BT Sport revenues and business activity in its enterprise units. Other FTSE 100 stocks have been hit a lot harder.

While BT’s profits fell around 20% during the early stages of the pandemic, at least it still posted profit – of just over £1bn in the first half of the year. It axed its dividend but plans to reinstate it next year. Openreach continues to roll out nicely.

BT’s earnings have declined for four years in a row, but that should reverse once current investments pay off and the country is liberated from lockdown. Many problems are priced in, with the company trading at just 6.9 times forward earnings. I would check out the BT share price before the dividend is reinstated, rather than afterwards.

These two FTSE 100 stocks could fly

I’d also take a close look at quality assurance provider Intertek Group (LSE: ITRK). I was just Googling away and spotted a headline from The Daily Telegraph saying “Intertek is a great business but the valuation is rich”. The article was written in March 2009 but the same headline could serve today. It trades at a premium valuation of 27.1 times earnings.

Inevitably, Intertek has been hit by the pandemic, with earnings down almost 10% to £941m in the four months to 31 October. Impressively though, management expects to cut debt this year, to between £570m and £590m.

The business has shown its resilience, while its product testing and certification and services are likely to be in demand once the global economy starts moving again. A return on capital employed a 47.9% is also a promising sign.

The shares were growing strongly before the crisis and could do so again. That toppy valuation could fall when earnings pick up.

Both FTSE 100 stocks appeal to me. I’d buy them before the next stock market rally.

Peter Michaelis, manager of the Liontrust UK Ethical Fund, has summed up the attraction well: “To me, it’s a commonsense way of investing, you invest in the way the world is going to be, not the way the world has been in the past.”

With this in mind, here are three ethical UK shares I’d be happy to buy today for the long term.

Wind of change

The British Isles has about the best wind resource in the world, so it’s no surprise to find ethical UK shares available in this form of renewable energy. Greencoat UK Wind (LSE: UKW) is a significant player. It’s a FTSE 250 firm, and has a market value of £2.5bn at a current share price of 134.6p.

The company gives investors the opportunity to participate directly in the ownership of UK wind farms. It aims to provide shareholders with an annual dividend that increases in line with Retail Price Index inflation. It’s on track to pay a dividend of 7.1p a share for 2020. At the current share price, this gives a yield of 5.3%

I think the yield and dividend-growth policy make Greencoat a highly attractive stock. Not only for income-seeking investors, but also for those looking to benefit from the powerful wealth-compounding effect of reinvesting dividends.

Ethical UK shares #2

Halma (LSE: HLMA) is a FTSE 100 firm, valued at £9.6bn at its current share price of 2,530p. Its technologies are focused on growing a safer, cleaner and healthier future. And many of its businesses are market leaders within the four sectors it operates in:

• Process Safety. Technologies that protect people and assets at work.
• Infrastructure Safety. Technologies that save lives, protect infrastructure and enable safe movement in public spaces.
• Environmental & Analysis. Technologies to improve environmental protection and the security of life-critical resources.
• Medical. Technologies which enhance the quality of life for patients and improve the quality of care delivered by healthcare providers.

I’m confident Halma is a strong ethical UK share with high growth prospects for decades to come. This is why I’d be willing to pay a premium 45 times earnings for the stock with a view to owning it for the long term.

Ethical UK shares #3

Intertek (LSE: ITRK) is another FTSE 100-listed UK share with similar ethical credentials to Halma. And it has similar long-term growth prospects, in my view. It comes with a market value of £9.5bn, and a rating of 32 times earnings at its current share price of 5,870p.

The company’s network of more than 1,000 laboratories and offices in more than 100 countries delivers assurance, testing, inspection and certification solutions. Post-Covid-19, it sees new opportunities, due to the world moving further towards:

• Safer, more diversified supply chains with greater traceability, improved intelligence and increased resilience.
• A lower carbon economy, stay-local lifestyles, more remote working, distance learning and online shopping.
• Better personal safety, higher health, hygiene and wellbeing standards and greater investment in healthcare.

I’d happily back all three of these ethical UK shares to help improve not only the world at large, but also my personal wealth!

Both shares are on my watchlist of stocks to buy. They’ve both been outstanding performers for many years and have hardly suffered any disruption from coronavirus.

FTSE 100 dividend stock #1: quality assured

Intertek Group (LSE: ITRK) provides quality assurance services to companies and other organisations all over the world. The firm’s activities cover a huge range of testing, certification and inspection services across many industries.

As you can imagine, this is a growing business. I can’t see this changing in my lifetime. In an increasingly technological and connected world, companies, governments and consumers need independent assurance that standards are being met consistently at all times.

The group’s half-year results were published last week, giving us a first look at how coronavirus has affected its operations. Although revenue for the first half of 2020 only fell by 8% to £1,331m, there was a larger hit to profits. Intertek’s adjusted pre-tax profit fell by a third to £151.5m.

However, the group’s cash generation remained very strong and, even at this difficult time, profit margins remained in double digits.

The company expects performance to be better during the second half of the year. Management also believes the pandemic has created new opportunities for medium-term growth.

Why I’d buy

Intertek’s idea of a bad year would be a good result for many businesses. The group is consistently profitable and has expanded over the years through small, specialist acquisitions. I believe this is a low-risk approach that should continue to work well.

The shares currently trade on 28 times 2021 forecast earnings, with a dividend yield of 1.9%. Although this is quite pricey, I think Intertek’s profitability and sustainable growth means the stock will probably continue to beat the market over the long term.

If you’re still building your retirement portfolio, I see this FTSE 100 dividend stock as a great buy.

FTSE 100 dividend stock #2: essential repeat purchases

Another company that’s performed well through the pandemic is distribution group Bunzl (LSE: BNZL). This global company provides a huge range of consumable products to businesses and public sector customers.

Products sold include food packaging, cleaning products, personal protective equipment and many other such items. The key theme is that it’s all essential and consumable — so customers all make regular repeat purchases.

As you might guess, Bunzl has benefited from a surge in demand for cleaning and hygiene-related products this year. In June, the company said it expects sales to have risen by about 6% during the first half of the year. Based on last year’s half-year sales of £4.5bn, that’s more than £270m of extra sales.

Like Intertek, Bunzl enjoys strong profitability and good cash generation. Debt levels look comfortable to me and the company has a long, consistent record of growth.

As I write, Bunzl shares trade on about 18 times 2021 forecast earnings, with a dividend yield of 2.2%. This is a stock I’d buy today and happily hold forever. I don’t think it will disappoint.