Unilever (LSE: ULVR) (NYSE: UL.US) is one of the most impressive companies I have ever come across.
The main reason for this is the sheer quality of its products and the range of goods it sells. For instance, is seems to sell everything from shampoo to ice cream and from lower fat spreads to deodorant.
You name it, it sells it.
However, the range of goods sold is only surpassed by the quality of them and, for me, this is the main reason why Unilever seems able to enter almost any territory in the world and, within a relatively short space of time, find its products stocked in a range of shops and being bought by a loyal customer base.
Without this quality of product, Unilever would find it difficult to see off the substantial competition it faces from other brands and local favourites. Furthermore, the quality of its products and the fact that nearly all of them are consumer staples in a more developed world means that Unilever should continue to prosper over the long run.
However, high-quality products are not the only reason why I’m a fan of Unilever.
I’m also impressed by the high returns delivered to shareholders. For instance, return on equity was a hugely impressive 31.4% last year and has averaged just under 35% over the last 5 years.
These figures are not only impressive but, when the range of figures is taken into account, it is clear that Unilever enjoys a relatively stable level of returns, with return on equity being at least 29% in each of the 5 years.
Furthermore, Unilever currently trades on a price to earnings (P/E) ratio that, in my view, is undemanding when the quality of the company is taken into account. Although a P/E ratio of 18.9 is not exactly low, I’ve learnt as a private investor that sometimes quality must be paid for.
So, I’m bullish on Unilever as a result of the wide range and high quality of the goods it sells, as well as the high and consistent returns it offers to shareholders and the fair P/E that it currently trades on.
