When I began my investing journey many moons ago, reviewing and learning about different FTSE stocks seemed like a bit of a blur, and a bit convoluted.
Thankfully, there are many more resources available today, including The Motley Fool!
Speaking of investors starting out, two picks I reckon investors should consider for a starter portfolio are Unilever (LSE: ULVR) and Britvic (LSE: BVIC).
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Unilever
The business is one of the largest consumer goods firms in the world. Operating across the globe, it offers some of the most popular brands for all consumer needs. Think food, healthcare, hygiene, cleaning products, and more.
Unilever shares are down 5% over a 12-month period from 4,202p at this time last year, to current levels of 3,963p.
The recent pullback is an opportunity, if you ask me. The shares currently trade on a price-to-earnings ratio of 16. This is a level not seen for some time.
I reckon Unilever shares have fallen due to macroeconomic volatility. This includes rising interest rates, inflationary pressures, and a cost-of-living crisis. This is an ongoing risk I’ll keep an eye on. For example, rising costs can take a bite out of profit margins, which underpin returns.
Speaking of returns, a dividend yield just under 4% is attractive to help build an additional income stream. However, it’s worth remembering dividends are never guaranteed.
Despite a sticky patch at the moment, I reckon the cream eventually rises to the top. Unilever is certainly in that category. Its exceptional brand power, reach, and track record are hard to ignore. Plus, the business is changing its approach by disposing of lesser performing brands, and investing further into better ones. This could yield even better results and investor returns.
Britvic
As one of the largest soft drinks producers in the UK, Britvic is a great stock for returns and growth, if you ask me. As well as selling its own popular brands, it also has an exclusive and lucrative agreement with PepsiCo to bottle and distribute their products in the UK.
Like Unilever, Britvic shares have fallen over a 12-month period, in this case by 7%. At this time last year, they were trading for 876p, compared to current levels of 811p.
Britvic’s growth story to date is impressive, driven by organic and acquisition-led growth. However, the shares look very attractive on a price-to-earnings ratio of just 12 right now.
Next, Britivic shares offer a dividend yield of 3.8%, and looks well covered by a healthy balance sheet.
One risk I must note is that the firm’s drinks can be considered premium. The current cost-of-living crisis means consumers are looking for more bang for their buck, and may turn to unbranded essential ranges from supermarkets, or discount retailers. This could hurt performance and return levels.
I’d consider the current risk mentioned as short-term, whereas investing should be about long-term growth and returns, if you ask me. I think the pros outweigh the cons, including Britvic’s established track record, passive income, currently cheaper-than-usual shares, and brand power.
