Experienced Investor
Stock of the week: Unilever
Graham Spooner, investment research analyst at The Share Centre, picks Unilever as stock of the week for low risk investors.
The manufacturer of common household brands such as Ben and Jerry’s and PG Tips, Unilever’s, share price has fallen back to pre-Brexit levels since the middle of October. Prior to this, the shares rose sharply following the EU referendum in June and the weakening of the pound, which increases the value of Unilever’s overseas earnings.
The shares now trade on a 2017 price/earnings ratio of 17.8, which investors should note is slightly better than the group’s main peers, with a prospective dividend yield of 3.5% and this is expected to rise well ahead of inflation over the next couple of years.
The firm is well managed with a diverse portfolio of global brands and a healthy dividend, it continues to see the benefits of its cost-cutting measures and a recovery in emerging markets. We therefore maintain our ‘Buy’ recommendation for lower risk investors.
