Join me for a ride with Unilever Plc (LON: ULVR) throughout 2013.
One company that has particularly caught my eye of late is Unilever (LSE:ULVR) (NYSE: UL.US). It is going on my watchlist along with J Sainsbury and I will be following both with a potential eye to investing.
A consumer goods giant -- Unilever claims that more than two billion people use its products on any given day -- numerous brands such as Dove, Pond's, Vaseline, Wall's, Ben & Jerry's, Knorr, Brylcreem, Domestos, Hellmann's, Cif, Radox and Surf highlight the strength in depth of Unilever's portfolio. The products are grouped into personal care, home care, foods and refreshment and are sold worldwide.
Those brands are a solid base for any company to trade from and many have strong loyalty that hold them in good stead in the good times and bad.
Unilever has seen sales increase steadily each year since 2009, with the latest annual figures showing an 11% rise to €51bn with underlying growth of 7%. The company's P/E ratio has risen over the last few years from 12 to the current 19. With the price currently at 2,536p a multiple of 19 still seems to be slightly on the high side so while I am certainly interested in getting in, I may wait a little while to see if more value develops.
Boring, boring Unilever
Whilst I like to live on the edge as much as the next investor with a small-cap holding or two, the majority of my money is invested in big, dull, defensive companies that I can depend on.
I love Unilever for providing me with that warm glow of comfort. Having said that, an 11% increase in turnover is impressive indeed for such a plodder. It wasn't always the case, with a pretty stagnant period between 2005 and 2009 seeing turnover and operating profit stubbornly sticking to €40bn and €6bn respectively.
Only in the last few years has Unilever developed, powered by the emerging markets of Asia and Africa. It will be interesting to see how well Unilever's products can penetrate into those two highly populated -- and thus potentially lucrative -- regions.
A bit of hard cash back from a company I own is always welcome and Unilever has a decent track record - this presentation shows the dividend compounding at an 8% average every year since 1979. The current payout represents a 3.6% yield, which is not the highest in the FTSE but is no slouch either and is comfortably covered by earnings -- allowing room for investment in developing those new markets.
So this company, dependable as Domestos, comforting as Radox and delivering returns as shiny as Brylcreem, is one of my potential purchases this year.
It's not the only share worth looking at though. If you are looking for an income share it's worth taking a look at one of our latest hugely popular and absolutely free reports for a potential 5.7% yield.
On the other hand, if you want to focus on topping Unilever's growth, you could do worse than considering the well-known business covered in this also totally free report.
> Barry does not own any share mentioned in this article. The Motley Fool has recommended shares in Unilever.