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- The defensive characteristics of Unilever are always a bonus, but especially in uncertain economic times such as these.
- The company’s new CEO has laid out a sensible plan for increasing growth rates, moderately increasing margins in a sustainable fashion, and continuing hefty returns to shareholders.
- The devil is in the details but at about 13.5 times trailing earnings (versus a five year mean P/E of 19.4x), we don’t think investors have priced in much chance of his plan succeeding quickly.
- This may have created an attractive opening for long-term investors who think this management team can actually wring value out of its slew of household names ranging from Ben & Jerry’s ice cream to Dove soap and Domestos bleach.
- With a low valuation, Unilever’s shares are offering an attractive 3.8% trailing dividend yield alongside a share buyback programme that has returned £4.5bn via repurchases over the past two years alone, shrinking the share count by 2.7% during that period.