Stock of the Week: Compass

VIDEO: The world's largest catering company is just plugging away, but some decent results have caused investors to re-evaluate its proposition

James Gard 12 June, 2023 | 8:14AM
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Another company making its debut stock of the week debut is Compass, the world’s largest catering company. Compass has managed to benefit from some structural trends such as outsourcing and changes to office life in the post-Covid era. The fully staffed office canteen is probably a thing of the past, but companies still want onsite catering that’s flexible – and employees demand more than just stale sandwiches and crisps. In the battle to get staff back into the office, a decent lunch goes a long way.

That’s where Compass comes in. It’s also managed to grab some market share from smaller players that didn’t make it through the pandemic.

"The firm's global reach makes it one of the few vendors that can efficiently fulfil the needs of multinational companies with diverse locations", our market strategist Michael Field says.

I’ve been writing about Nvidia all week and as a stock Compass just doesn’t have the wow factor. But it’s one of those low glamour stocks that quietly gets on with their business. This is a feature of British companies after all. Results were a month ago, but our anlaysts have just hiked their fair value to £22.50 from £22.60. Shares are around £21.70 after a 12% rise this year. Half-year numbers showed a chunky rise in free cash flow, earnings per share.

The dividend was hiked by nearly 60% in an an environment when UK companies are holding or making modest rises to their payouts. Compass is also buying back 750 million pounds of shares in 2023. For Morningstar, I’m James Gard.

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James Gard

James Gard  is senior editor for


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