Business & Investment

Why not buy Unilever stock in a hurry

Unilever (LSE: ULVR) Stocks are popular with many UK investors.It’s the biggest company in FTSE 100 Depends on market capitalization. It is a truly international company and previously had the dual structure of the Anglo-Dutch War. This is currently consolidated on the list in the UK.

Investors who want a solid and relatively defensive company have a lot to like, but I’m not sure if it’s the share they want to put their money into. Especially after last week’s results.

Summary of results

These results show a 1.9% increase in underlying sales for the full year. Most of the improvement was due to increased volumes rather than price increases.

Underlying operating profit was below analysts’ expectations. It increased by 0.7% when the exchange rate was included and decreased by 5.8% when the exchange rate was excluded.

On the positive side, debt decreased, cash flow increased, and dividends increased. It increased by 4% in the fourth quarter. Net liabilities are now well managed as they represent 1.8 times cash income.

Regarding the results, Alain Jope said:Earlier this year, we refocused our business on competitive growth and providing profits and cash as the best way to maximize value. Focusing on the fundamentals of growth has brought about a gradual change in operational excellence. As a result, we gained market share in more than 60% of our business in the previous quarter, based on a measurable market. “

Pros and cons of investing in Unilever stock

Unilever Relatively low exposure to cleaning agents, Especially compared to Reckitt Benckiser, That means I had more trouble during the pandemic. Beauty and personal care products make up the majority of sales. They make up about 41% of the total and are not as demanding as customers are at home.

Unilever has strong brand, growing international markets, strong environmental, social and governance (ESG) qualifications. ESG focus is becoming a more important investment standard for many institutional investors and may attract future investments.

The company has also identified areas that it wants to offload, such as the tea business. This rationalization allows you to focus your huge marketing budget on brands that deliver higher growth and profits.

Overall, I don’t think Unilever’s stock is in compliance with the bill, as we’re looking at stocks that will increase passive revenues and drive portfolio capital growth in the future. Its growth is sluggish — even before the pandemic. Also, the price-earnings ratio is about 17, so it’s not cheap. I don’t think management is doing enough to raise profit margins. So far, I don’t think the strategy is working or moving fast enough.

So Recent stock price declineAnd, despite the company’s many strengths, I don’t want to buy Unilever shares.

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Andy Ross owns a stake in Reckitt Benckiser. Motley Fool UK recommends Unilever. The views expressed about the companies mentioned in this article are those of the author and may differ from the official recommendations made by subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, by considering different insights, Better investors than us.



Why not buy Unilever stock in a hurry

https://www.fool.co.uk/investing/2021/02/13/why-i-wont-be-rushing-to-buy-unilever-shares/ Why not buy Unilever stock in a hurry

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