Premium content from Motley Fool Share Advisor UK
Our monthly Ice Best Buys Now are designed to highlight our team’s three favourite, most timely Buys from our growing list of income-focused Ice recommendations, to help Fools build out their portfolios.
“Best Buys Now” Pick #1:
Unilever (LSE:ULVR)
- Full year results from Unilever were fine. Not amazing, but they did show good progress in restoring gross margins over the second half of the year and positive volume growth in Q4, a nice change from lower volumes through the first nine months of the year.
- New CEO Hein Schumacher has his work cut out for him but thus far we’ve been happy with what we’ve heard from him. He’s refreshed the senior management team, is tying remuneration for him and more managers to performance based targets, continuing Alan Jope’s organisational refresh, and encouraging managers to pursue incremental improvements in areas such as purchasing, logistics, product development and marketing.
- It will take a while for these changes to bear fruit and the bigger question of what to do with the company’s heavy weighting towards lower growth food & ice cream products hasn’t been decided yet.
- But there’s a lot of potential in Unilever’s collection of brands and exposure to emerging markets. With low debt, lots of cash flow, an attractive 3.8% dividend yield and further €1.5bn in buybacks planned for this year we think the company’s current valuation is fairly undemanding and that members would do well to take a closer look at this FMCG giant in March.
