3 Of The Steadiest Companies You Can Buy Today: Unilever Plc, Diageo Plc And Compass Group Plc

Unilever plc (LON:ULVR), Diageo plc (LON:DGE) and Compass Group plc (LON:CPG) have a winning record stretching back decades. I expect each business to continue well into the future.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Unilever

Unilever (LSE: ULVR) (NYSE: UL.US) is the company behind some of the top brands in food and domestic products. Manufacturing in large volumes brings significant economies of scale. The strong margins mean that Unilever can spend huge amounts advertising its products.

After a large cut in 2009, Unilever’s dividend soon recovered. On average in the last five years, the payout has been increased at a rate of 5.3% a year.

Earnings are expected to increase this year and next, with dividend growth picking up, too. The shares are available today at 16.9 times forecasts for 2014, with a prospective yield of 3.8%.

Diageo

Drinks group Diageo (LSE: DGE)(NYSE: DEO.US) is famous for its Guinness, Smirnoff and Bailey’s brands. It leverages this to demand higher prices from its customers. Diageo’s heritage helps to secure its profits for decades into the future.

Diageo has upped its dividend in each of the last five years by an average of 6.7% a year. Earnings growth has outstripped this, increasing by an average of 10.3% a year.

EPS for 2015 is expected to be 30% higher than it was for the 2013 financial year. Dividends are expected to be 20% higher by then.

This puts the shares on a prospective P/E of 16 for 2015, with an anticipated yield of 2.8%. That’s not cheap but top companies rarely are.

Compass Group

Compass Group (LSE: CPG) is a leading supplier of outsourced catering and facilities management services. The company makes nearly half of its sales in North America and is enjoying strong growth in Australia, Turkey and Brazil.

The size and quality of Compass’ customer base brings a high degree of reliability to its profits.

Dividends at Compass Group have increased at an average rate of 15.9% a year in the last five years. Smaller advances are expected for the next two years, rising ‘just’ 10.4% and 9.9% this year and next. EPS is expected to increase by 19% this year and 17% the next.

The shares today trade on a 2014 P/E of 16.9, with a prospective yield of 3.0%.

If you are looking for solid shares, get the latest Motley Fool report “5 Shares To Retire On” . This detailed research from our team of expert analysts is entirely free and will be delivered to your inbox immediately. Just click here to start reading now.

> David does not own shares in any of the above companies. The Motley Fool has recommended shares in Unilever.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

More on Investing Articles

Investing Articles

£20k in a Stocks & Shares ISA? Consider targeting a £3,121 monthly passive income like this

Looking to build a large passive income for retirement? Royston Wild show how a diversified ISA portfolio could build long-term…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Up 26% this week! Could this FTSE 250 share soar over the next year?

There could be a lot of potential in the mid-cap stocks of the FTSE 250. After a major City bank…

Read more »

Silhouette of a bull standing on top of a landscape with the sun setting behind it
Investing Articles

Can anything stop this FTSE 100 growth machine?

Even the pandemic wasn’t able to halt the progress of FTSE 100 events company Informa. But is the stock still…

Read more »

Investing Articles

Will the Rolls-Royce share price hit £6 before the New Year?

At 599.8p, the Rolls-Royce share price has come within a whisper of £6. It’s never been so high, but could…

Read more »

Smartly dressed middle-aged black gentleman working at his desk
Investing Articles

2 REITs I’m considering buying to target a long-term passive income!

REITs can be great sources of passive income over the long term. Here are a couple from the FTSE 100…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

I’m preparing for a stock market crash in 2025

Our writer explains why he's acting 'as if' there will be a stock market crash in 2025, not spending time…

Read more »

Investing Articles

Starting a Stocks and Shares ISA in 2025 could make me a millionaire. Here’s how!

Christopher Ruane outlines a couple of steps he plans to take in the coming year to boost his long-term Stocks…

Read more »

Light bulb with growing tree.
Investing Articles

Still in pennies, could the ITM Power share price hit £6 again?

A trading update from ITM Power has boosted our writer's optimism in the prospects for ITM Power despite its share…

Read more »