Скачать или смотреть Should you buy Unilever stock? (September 2023)

Unilever stock analysis. Ticker: UL.
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Unilever is one of the world's largest consumer goods companies with over 400 brands, used by 3.4 billion people. These brands include Axe, Ben & Jerry's, Comfort, Dove, Hellmann's and many more.

Historically, Unilever has been a reliable investment, however, the stock has underperformed recently, falling around 5% over the last 3 years. That’s in sharp contrast to Procter & Gamble which has risen over 20%.

Today, Unilever has a valuation of 118.7 billion euros. It’s got 7.6 billion of cash and 24 billion of long-term debt so the enterprise value is 135 billion.

Revenue over the last 12 months was 61 billion with 8.3 billion of net income and 6.2 billion of free cash flow. So Unilever stock is valued at 14 times earnings and 22 times free cash flow.

And the company also pays out an attractive dividend of 3.65%.

So based on the financials, Unilever looks good. It’s got healthy free cash flow and strong operating margins of 19%. And Unilever’s revenue is well diversified across various segments; beauty and wellbeing, personal care, home care, nutrition and ice cream.

Many of these products, like food, shampoo and detergent are essential items or used on a daily basis. That’s why even during the pandemic, the company’s revenue was down only 2%. And because people need these products, Unilever is able to raise prices during periods of inflation.

So the question is why has Unilever underperformed? One of the reasons is that Unilever is simply a mature company that is not growing as fast as it did in the past. Net income over the last 10 years has grown at only 6% a year.

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