Unilever PLC (UL)

A safe European stock?If you want growth in a dividend and a consumer products company, this one is head and shoulders above the others. They are the biggest consumer products company in India and China, which has the kind of population growth that this company can take care of. They are also getting more involved in e-commerce, which the others are not.

About half their business comes from Asia, South America and the Middle East. A great company and very well-run. A good quality, global consumer product company that gives you an indirect exposure to emerging markets. Valuation is a little rich for the growth profile that you are getting. Prefers the more local players. Dividend yield of 2.6%.

A stock of 2 parts. 50% is emerging markets and 50% is developed markets. In the last 5-6 years, where emerging markets were the darlings, this was one of the “go to” stories. Now we have a situation where the US is recovering and markets are improving. We are starting to see a little more growth and upside in Procter & Gamble. You have a very good total return story here. If you have long-term money, this would be one to buy and hold for a total return story. However, if you are looking to trade he would go elsewhere.

This is the European version of Procter & Gamble (PG-N). It’s a big consumers product company and they make all kinds of pretty much everything you can think of. Overall, it’s okay, but keep in mind it is a defensive kind of name, and probably won’t do as well in a pro-growth environment that we are in right now.

When the financial crisis happened, the stock was a darling because the emerging markets were running. This company is effectively a 50% emerging market and 50% developed market. Then the US started to recover and that sort of lost its gleam. He likes the stock. You want to buy this at a point in the cycle where staples are not super in favour. He thinks that is starting to happen.

(Top Pick Mar 18/16, Up 16%) 55% in emerging markets and they are moving more into higher margin personal care products.

(A Top Pick Jan 17/17. Up 22%.) He feels consumer staples, particularly now, is an important spot in your portfolio.

She has owned UL-N for 4 years. She thinks the price is significantly too low. She owns it because 15% of revenues is from emerging markets. That is where the growth is in consumer goods.

They really pushed into a lot of the emerging markets and spent a lot of SG&A and did not really get the benefit out of it. They have so many products and some are not generating the rate of return that is required of them, but they have still kept them on. If they start selling them off you could see improved margins.

One of those companies that serially raises its dividend. If you are looking for dividend protection and dividend upside, this is your kind of company. About 3 years ago, emerging markets was the big story. 50% of their Book is emerging markets, and 50% is with a developed economy. It’s corrected nicely and would offer some entry, but at the moment, the rotation out of safe stocks is playing on this story. There might be a little more downside. The business is solid.

He likes this because it is the 3^rd largest globally with 57% personal products and 43% consumer food items. If there is any weakening in the dollar, you are going to see this company improve their performance. 50% of revenue is coming from emerging markets, so this is a growth area. Dividend yield of 3.42%. (Analysts’ price target is $36.72.)

A great company and a solid one. He has reduced his exposure to consumer staples. Also prefers Nestlé (NSRGY-OTC). For the last 7 years, consumer staples have been doing very, very well. Feels the cash flow multiples are on the high end right now. If we start to see the growth in the US economy start to pick up, there are other places he would rather be.

Has held this in her clients’ portfolios for a number of years. She owns this for its exposure to emerging markets, the consumer packaged goods. Over 60% of revenues are from emerging markets. A lot of the economies in emerging markets have been going through a difficult time, so this is affecting them. Given the pullback, it is an opportunity. Long-term, this is where their secular growth is. They have been expanding into personal care, which tends to have higher margins than the packaged foods business. Has an attractive yield of over 3%.

(Market Call Minute.) Expensive. There are a lot of other places to invest in the market.

A great company. One of the unique things is that they have accumulated brands all over the place, and then went aggressively into emerging markets. Many brands were not making money, and they sold those off. They still have to do a little more. They realize they were not making much money in emerging markets, so they need to reassess what products are going to be doing well, and how much to spend to market them. Thinks they are at that stage now. Expects in the next little while you will see margin improvement, especially on the emerging-market products.