3 Reasons to be Bullish about Unileve...
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Aug
11
Tim Lambert
3 Reasons to be Bullish about Unilever
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Investors should be bullish on Unilever (NYSE: UL), the British consumer goods behemoth, even though it is down for the last week and month of market action (chart below).

Like Kraft Foods (NASDAQ: KRFT), Mondelez International (NASDAQ: MDLS), and others in the sector, there are many reasons that Unilever has a favorable outlook for the long term investor.

Unilever, Kraft Foods, and Mondelez International all sell consumer goods and products around the world.  Unilever has many brand names that are easily recognizable.  With consumer spending increasing in emerging market countries, that puts Unilever in an ideal position to profit from that growth.

Unilever is also very profitable.

The profit margin of Unilever is 20.50 percent.  That is much higher than the profit margin for Kraft Foods.  It is over twice as high as the profit margin for Mondelez International.  Contributing to this are very favorable returns and margins for Unilever.

The shareholders are rewarded by the generous dividend yield of Unilever.

The dividend yield for Unilever is over 3.60 percent.  At present, the average dividend yield for a member of the Standard & Poor’s 500 Index (NYSE: SPY) is around under 2 percent.  Overall, the dividend structure of Unilever is very robust.  The company has a history of increasing its dividend income payments to its shareholders.  That means that by simply not selling the stock those owning the shares get a raise!

Despite the recent performance, it has been a bullish year for Unilever.

For 2014, the stock is up more than 7 percent.  The Standard & Poor’s 500 Index is up around 5.6 percent for the year.  Over the last twelve months of market action, Unilever has rise by more than 11 percent.  With a miniscule short float of just 0.15 percent, few from the investment community are willing to bet that the stock price of Unilever will fall in the future!

 

 



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