A Glance At Unilever – Market Watches The Stock Closely!

  • Jan 29, 2019 GMT
  • Team Kalkine
A Glance At Unilever – Market Watches The Stock Closely!

Unilever, headquartered in London, is a producer and marketer of fast-moving consumer goods (FMCGs) such as food, beverages, home care, health and wellbeing products. The company operates through more than 400 brands across the Americas, Europe, Asia-Pacific, Africa and the Middle East regions. The brands comprise Knorr, Hellmann’s, Lipton, Wall’s, Becel, Blue Band, Omo, Lux, Dove, Rexona, Surf Excel, Comfort, Sunsilk, Pureit, Suave and Axe, to name a few. Its distribution channels include supermarkets, hypermarkets, wholesalers, cash and carry, small convenience stores, e-commerce, out-of-home and direct consumer channels. The company has pledged to reduce its carbon footprint extensively by 2030 and was ranked number one in its sector as per Dow Jones Sustainability Index 2017.

Working on long-term compounding growth model and continuously engaging in high levels of re-investment, has helped the company to improve margins and cut costs. With 58% of the business located in emerging markets, the company recorded a EUR53.7-billion turnover in 2017. According to the Unilever analysts’ consensus for Q4 2018, the turnover of EUR12.1 billion with underlying sales growth rising by 1.5% in volume and 3.5% otherwise was depicted. As per the company, the growth figures have been mainly driven by improvement in volumes and a lower contribution from price growth, specifically in emerging markets. Group’s results for full year 2018 are set to be announced on January 31, 2019.

Recently, the company introduced reusable packaging innovations for nine of its brands including four new product formats, all of which will be tried on Loop. Loop is a business model, being spearheaded by Terracycle, a recycling firm based in New Jersey, for premium durable packaging which is delivered to the customer, returned and refilled. According to Unilever, it is a great platform to work in coalition with other companies like Nestlé, PepsiCo, Procter & Gamble etc and shift consumer behaviour while making circular packaging commercially viable.

In addition, Bio-on, an Italian intellectual property firm, revealed a new range of environmentally responsible sun creams in collaboration with Unilever Plc. The product has been developed by Bio-on, with 100% natural biodegradable bioplastic, and will be sold by Unilever under the brand name My Kai. It is thus, in line with the Unilever Sustainable Living Plan business model objectives.

As an international giant and strategic acquirer, Unilever conducts various conferences for companies, like one coming up in February 2019, to gauge start-ups as they compete on the basis of business models, services, cost effectiveness, and rapidly deployable solutions. In the past three years, it has implemented 22 acquisitions globally followed by a recent takeover of the Laundress, a New York-based laundry and home cleaning products, with the idea of increasing its market presence in high-end home care products.

Unilever (LSE: ULVR) has always been a reliable stock to consider even amidst the Brexit uncertainty. The company has a robust balance sheet and extensive product portfolio with an expansive geographic reach. Moreover, consumer staples are not that highly susceptible to macroeconomic or political developments. In addition, Unilever’s revenues, earnings, and dividends have been stable over the years.

Altavista Wealth Management Inc, a regular investor in Unilever Plc ADR (UL) since a few months, seems to be bullish on the blue-chip company. As of Q3 2018, Altavista Inc increased its stake in UL by 25.27% as per regulatory filing with the U.S. Securities and Exchange Commission, buying 9,268 more shares as the company’s stock declined a bit in the market. On the contrary, Wallace Capital Management Inc reduced its stake in Unilever N V (UN) by 3.16% as of Q3 2018 (about 13,343 shares were sold). The Unilever FTSE 100 listed shares were trading high at GBX 4,002.5 as at January 29, 2019, mid-day trading. The market is watching this dividend player closely as the results will be out soon.

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