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

Concept of two young professional men looking at a screen in a technological data centre
Investing Articles

This forgotten FTSE 100 gem could be the best bargain on the stock market

The FTSE 100 is full to the brim of high-quality businesses. But this Fool has his eye on this 'forgotten'…

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

Here’s a FTSE 250 stock I’d put 100% of my money into

If this Fool could buy just one stock from the FTSE 250, Games Workshop would be his choice. Here, he…

Read more »

Fans of Warren Buffett taking his photo
Investing Articles

2 reasons Warren Buffett might love this stock, and 1 reason he might avoid it like the plague

Warren Buffett's one of the best stock pickers of all time. But would he approve of Barclays shares? This Fool…

Read more »

Union Jack flag triangular bunting hanging in a street
Investing Articles

Down 28% in a week! What’s going on with the share price of this FTSE 250 British icon?

There’s one stock in the FTSE 250 that took a bit of a battering last week. But I’m not surprised,…

Read more »

Two white male workmen working on site at an oil rig
Investing Articles

At around £28.50, Shell’s share price looks cheap to me

Shell’s share price still looks undervalued against its fossil-fuel-focused rivals to me, despite it pushing back its carbon reduction targets.

Read more »

BUY AND HOLD spelled in letters on top of a pile of books. Alongside is a piggy bank in glasses. Buy and hold is a popular long term stock and shares strategy.
Investing Articles

433 shares in this FTSE 100 dividend superstar could make me £18,803 in annual passive income!

This overlooked FTSE 100 gem has one of the best yields in the index, looks undervalued, and makes me big…

Read more »

Investing Articles

2 under-the-radar investment trusts I’d buy for a new Stocks and Shares ISA

Here are two fantastic trusts that I'd happily snap up today if I were building a Stocks and Shares ISA…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

If I’d put £1k in Games Workshop shares 5 years ago, here’s how much I’d have now!

Games Workshop shares have proved to be a stellar investment in recent years. Charlie Carman examines whether this trend can…

Read more »