Are Unilever plc, Nichols plc and Majestic Wine plc about to crash?

One of the success stories of 2016 has been Unilever (LSE: ULVR). That’s because its shares have risen by 8% despite the company being dependent on emerging markets for the majority of its sales. With investors becoming increasingly nervous regarding the prospects for China and the rest of the emerging world in the first few months of this year, Unilever has performed surprisingly well and could continue to do so.

That’s largely because of its wide range of products. They provide it with a highly stable and resilient top and bottom line outlook. And with Unilever operating across the globe and therefore not being overly dependent on one region or country for its sales, its appeal as a defensive stock remains high. In fact, with the outlook for the world economy being highly uncertain, Unilever could become increasingly popular in the coming months and this could help to push its share price higher.

Certainly, Unilever is hardly cheap at the moment due to its shares trading on a price-to-earnings (P/E) ratio of 21.5. However, with other consumer goods stocks having higher ratings, Unilever looks more likely to rise in valuation as opposed to crashing after a strong period of growth.

Growth story

Also offering a relatively consistent financial outlook is Nichols (LSE: NICL), with the producer of Vimto enjoying highly robust earnings growth in recent years. For example, during the last five years Nichols has been able to record an increase in net profit of at least 10% in each year, with its bottom line rising at an annualised rate of almost 15% during the period. And while growth of 9% this year and 6% next year may be something of a comedown following such impressive growth, Nichols remains a top quality long-term buy.

As with Unilever, Nichols trades on a relatively high rating. Its shares currently have a P/E ratio of 19.8 and while this may put off some value investors, the resilience of the company’s top and bottom lines make it a worthy purchase at the present time. That’s especially the case with Nichols yielding 2.1% from a dividend that’s covered a healthy 2.4 times by profit and that could therefore rise at a brisk pace in future.

Improving outlook

Meanwhile, shares in Majestic Wine (LSE: WINE) have recorded a 47% rise since the turn of the year as the retailer seeks to make a successful turnaround following a highly challenging period. During that time, Majestic Wine is expected to have recorded a fall in its bottom line of over 50% in just two years, but with a sound strategy and an improving consumer outlook it’s forecast to post an increase in net profit of 25% in this financial year and 36% in the next financial year.

With such strong growth prospects, Majestic Wine is likely to become increasingly popular among investors. Its shares trade on a price-to-earnings growth (PEG) ratio of only 0.6 and could be on the cusp of a rise, rather than a fall.

Of course, finding stocks that are worth adding to your portfolio is a tough task, which is why the analysts at The Motley Fool have written a free and without obligation guide called 10 Steps To Making A Million In The Market.

It's a simple and straightforward guide that could make a real difference to your portfolio returns. As such, 2016 could prove to be an even better year than you had thought possible.

Click here to get your copy of the guide - it's completely free and comes without any obligation.

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