Recent Results Make Me More Bullish On Unilever plc, Centrica PLC And Bovis Homes Group plc

These 3 stocks are more appealing now than they ever have been: Unilever plc (LON: ULVR), Centrica PLC (LON: CNA) and Bovis Homes Group plc (LON: BVS).

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Shares in housebuilder Bovis (LSE: BVS) are flat today despite the company reporting an excellent set of full-year results. With trading conditions being highly favourable, due in part to low interest rates, Bovis was able to sell more houses at higher prices in the last year and this resulted in record profitability.

In fact, Bovis sold 8% more properties in 2015 than in 2014, with the average selling price rising by 7% to £231,600. Furthermore, its operating margin increased by 30 basis points to 17.3% and with the company having 14% more forward sales at the end of the year versus last year, its medium-term outlook appears to be very bright.

With Bovis trading on a price-to-earnings (P/E) ratio of just 7.8, it appears to offer superb value for money. Its bottom line is expected to rise by 20% in 2016 and with interest rates set to stay low, Bovis’s outlook is very encouraging. Furthermore, it yields 5.1% and this is likely to further increase demand for its shares in the coming months.

Turnaround on track

Also reporting recently was Centrica (LSE: CNA). Although at first glance its results appeared to be rather disappointing, with revenue and profitability both falling, the key takeaway is that Centrica is on track with its turnaround strategy. For example, its savings target of £750m by 2020 is set to be delivered, with the company targeting £200m of savings in 2016 and a further £500m by the end of 2018. And with adjusted operating cash flow being relatively resilient despite weakness in its markets, Centrica’s dividend potential remains very strong.

For example, it’s expected to yield around 5.8% in the current year and with its shares trading on a P/E ratio of 12, it seems to be very fairly priced compared to a number of other utility stocks. Although Centrica’s transition towards being a pureplay domestic energy supplier may not be a smooth one, it does have the potential to improve investor sentiment. With its latest update showing it’s on track to do so, it bodes well for the company’s current investors.

Long-term buy

Meanwhile, Unilever (LSE: ULVR) continues to offer superb long-term growth potential. Last month’s results release showed that emerging markets remain a key growth space for the business, with sales rising by 7.1% on an underlying basis across the developing world. With Unilever’s revenue being biased towards such markets, this bodes well for its long-term growth prospects. And with the company’s core operating margin rising by 30 basis points to 14.8%, it continues to boost its profitability alongside impressive top-line performance.

With Unilever trading on a P/E ratio of 22.2, it lacks value appeal compared to the wider market. However, its rating could go higher and has been higher in the past, which alongside its aforementioned growth prospects makes Unilever an excellent long-term buy.

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.

Peter Stephens owns shares of Bovis Homes Group, Centrica, and Unilever. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK has recommended Centrica. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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