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FTSE 100 stocks: a UK share I think will exit Covid-19 in terrific shape

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It’s clear that the Covid-19 crisis has changed the world forever. This means that the trading outlook for many UK shares has changed considerably. Share investors need to be aware of the investment pitfalls — and the opportunities — that have been created by the pandemic.

I myself have taken steps to embrace changing behaviours in the wake of the coronavirus outbreak. The acceleration of e-commerce adoption prompted me to buy shares of Tritax Big Box and Clipper Logistics for my Stocks and Shares ISA. This is even though future lockdown loosening threatens to slow down profits growth later in 2021. These UK shares provide distribution and warehousing spaces and services for retailers, couriers and manufacturers to reach their customers.

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There are plenty of British stocks I’ll be avoiding like the plague as well following Covid-19. It’s possible that successful vaccine rollouts could help the banks like Lloyds and Barclays bounce back in 2021, for example. But I’m concerned by the increased competition and environment of low interest rates that threatens long-term earnings growth.

A better UK share to buy?

Instead of buying the FTSE 100 banks, then, I’d much rather splash the cash on Unilever (LSE: ULVR). The fast-moving consumer goods (FMCG) colossus has seen demand for its Domestos bleach, its Persil washing powder and its Dove soap soar since the public health emergency began. This reflects elevated levels of consumer angst over infection levels. And it’s a phenomenon that will run on and on long after 2021.

Dice engraved with the words buy and sell, possibly in FTSE 100

City analysts expect annual earnings at FTSE 100-quoted Unilever to stagnate in 2021. This leaves the UK share trading on a slightly-toppy price-to-earnings (P/E) ratio of 21 times. And as a consequence, the company’s share price could sharply correct if trading begins to disappoint. One big worry for Unilever is the sharp slowdown in emerging market sales. Underlying sales in these territories rose just 1.2% in 2020 as the pandemic struck. This was down sharply from the 5.3% rise in 2019.

Why I love this FTSE 100 stock

I still think Unilever is a top buy though. I’m a fan of its broad geographic exposure and huge product ranges that offer security through diversification. And I like its gigantic portfolio of top-table brands like Vaseline petroleum jelly, Lynx deodorant and Ben & Jerry’s ice cream. These leading labels command huge customer loyalty that allows sales to keep growing during economic upturns and downturns. They helped total underlying sales at Unilever rise 1.9% in 2020 despite the public health crisis and the subsequent economic downturn.

I also like Unilever’s quick response to changing consumer trends. New product launches or acquisitions of existing brands cost a lot of money and success is by no means guaranteed. But in general the business has a strong track record in this area. Sales of its Pukka range of herbal teas continue to grow strongly since acquisition in 2017. And sales of its The Vegetarian Butcher products jumped a staggering 70% last year. The company acquired the plant-based brand in 2018 because of the soaring popularity of non-meat diets.

A Top Share with Enormous Growth Potential

Savvy investors like you won’t want to miss out on this timely opportunity…

Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!).

Not only does this company enjoy a dominant market-leading position…

But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks!

And here’s the really exciting part…

While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes.

That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021.

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Royston Wild owns shares of Clipper Logistics, Tritax Big Box REIT, and Unilever. The Motley Fool UK has recommended Barclays, Clipper Logistics, Lloyds Banking Group, Tritax Big Box REIT, and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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