The shares of Unilever (LSE: ULVR) (NYSE: UL.US) have rallied more than 2% over the last 24 hours after the consumer products giant announced yesterday that it had upped its exposure to the potentially lucrative Indian branded goods market.
Unilever, which is famous for brands such as Sure, Persil and Domestos in the UK, revealed it had increased its stake in Hindustan Unilever from 52% to 67%.
The deal is worth roughly £2.1bn, and highlights Unilever’s intensifying focus on consumers in high-growth markets, where an increasingly wealthy middle-class is becoming more brand-conscious.
Hindustan Unilever is the consumer products market leader in India, and had revenues of over £3.2bn last year. Like its UK equivalent, HUL sells familiar branded products like Vaseline and Dove to increasingly wealthy Indian consumers.
With a market cap of over £35bn, Unilever’s shares trade at 20 times expected earnings, and offer a prospective dividend yield of 3.3%.
Of course, whether that valuation, today’s news and the attractive economics of the consumer goods industry all combine to make shares of Unilever a ‘buy’ remains your decision.
While Unilever’s valuation reflects its emerging market potential, high-growth investment opportunities can provide excellent returns for smart investors, at the right price. These sorts of opportunities can be hard to identify ahead of time, but our team of top analysts have uncovered a potential candidate.
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> Mark does not own any share mentioned in this article.