Opinions
Charles Lannon
Reckitt Benckiser
RBGLY-OTC
DON'T BUY
Jun 24, 2015
$0.010
Stock price when the opinion was issued
misc consumer products
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Another consideration is Benckiser (RBGLY:OTC) which owns a wide portfolio of consumer products (e.g. facial washes, heartburn meds, condoms, cleansing pads, sore throat solutions). These are products that consumers will buy even in a recession, which makes RB defensive. Another plus is that RB products are sold in more than 200 countries with the U.K. totaling only 8% of revenues (from 2018). So, if British consumers do tighten their wallets if there's no trade deal, then RB is largely protected from that hit. Also, RB pays a decent yield of 2.32%, but boasts 16 straight dividend increases. That said, RB suffered a “modest decline” in operating margins last October when it guided down, but the new CEO plans to unveil a new plan this month when the company reports annual results. Again, RB isn't a screaming buy, but it's a fairly safe, long-term bet.
misc consumer products
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Hygiene products, lozenges, baby formula. Global. Suffered with management missteps, but has cleaned house. New team has increased revenues and profit margins. Getting better penetration in other markets and geographies. Going to see good earnings growth and rising dividend. Cheap. Yield is 2.80%. (Target price is in pounds.) (Analysts’ price target is $7088.50)
misc consumer products
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price target 7,153.68 GBP Like a mini Unilever in packaged goods. They make Lysol, for example. They made a bad purchase in 2019 of a baby food company that had distribution problems. That pressured the stock, but is now behind them. Revenues are growing near 10%, operating margins are up 3% and free cash is up 4% in the last year. They have a portfolio of brands that will do well. Highly defensive.
misc consumer products
TOP PICK
It also trades under the symbol RKT-LON. Lysol, very popular during the pandemic, is one of its major products, among others. It is undergoing a turnaround and is very well run, trading at a discount to other consumer products businesses, a good area to be in. Trades at 17X earnings with a 3% dividend and growing margins. It has unique products and could make some good niche acquisitions. Buy 16 Hold 5 Sell 0
misc consumer products
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Makes everything from over-the-counter birth-control products to food sauces. This has probably been the most popular European consumer staples stock. Very respected management team. Unfortunately most of that has been caught up in the price. Wouldn’t recommend at these price levels.