Unilever shares: should I buy?

first_img Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Nadia Yaqub | Wednesday, 17th February, 2021 | More on: ULVR Our 6 ‘Best Buys Now’ Shares I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Simply click below to discover how you can take advantage of this. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Enter Your Email Address Nadia Yaqub has no position in any of the shares mentioned. The Motley Fool UK has recommended Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.center_img Image: Unilever. Fair use. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Unilever shares: should I buy? Unilever (LSE: ULVR) shares have fallen since the start of 2021. But, Nick Train, one of the UK’s highest profile fund managers still likes the stock. He holds it in his Finsbury & Growth Income Trust portfolio. In fact, as at 31 January 2020, Unilever shares makes up 9.2% of the investment trust.So if Train likes the company, does that mean I should buy the stock in my portfolio? I’m not really convinced by Unilever’s investment case, but I’ll keep my eyes on the stock. Here’s why.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Competition is increasingLet me start by mentioning that Unilever operates under three divisions including beauty & personal care, home care, and food & refreshments. I think it has some of the best consumers brands. Persil, Ben & Jerry’s, Knorr, Lipton, Dove, and Vaseline are just a few of them.Unilever states that 2.5bn people across the world uses its products everyday. To me, that’s impressive. The global nature of its brands means that Unilever’s portfolio has some durability. But competition is increasing, especially from smaller and cheaper brands.This means that Unilever may have to compete over price. In my opinion, this is never a good thing. I reckon this could squeeze the company’s margins, which in turn may place pressure on the dividend. Especially when revenue and profitability growth has been limited over the past few years.Unilever shares currently offer an attractive dividend yield of 3%, which makes it a favourite among income investors. The company recently raised its quarterly dividend. But the increasing level of competition and potential margin and dividend squeeze makes me somewhat uncomfortable holding the shares in my portfolio.UnificationUnilever has recently completed a legal unification. This means that, unlike before, it now operates under a single parent company called Unilever PLC. But what does this mean for the shares?Well, I reckon it acts as a springboard for future growth. I think a simpler legal structure makes things like disposals and acquisitions easier. Rather than dealing with multiple companies, it will deal with one entity.This all makes sense to me but I’d like to see some evidence first. Unilever has announced that it will sell its tea business, which has only been growing in the low single-digits. To me, it’s rational to get rid of something that hasn’t been helping overall growth. For now, I think I’ll continue to monitor Unilever shares to see some evidence that the simple unified legal structure works.Covid-19Even before the coronavirus pandemic struck, Unilever’s sales growth had been sluggish. It’s well established in the developed countries but it had been focused on expanding sales in the emerging markets. But even Unilever’s business wasn’t immune from Covid-19.Earlier this month, Unilever reported a modest increase in its 2020 full-year sales. But I think the shares took a hit because profitability declined significantly. E-commerce grew by 61% and now online sales count for 9% of sales.While vaccines are now available, this pandemic isn’t over yet. My concern is that lockdowns and government restrictions could persist, which could hinder Unilever’s business. This could also impact the dividend.In my opinion, Unilever has an ambitious target to deliver 3%-5% underlying sales growth per year in the long term. I’d much rather see some improvement on the sluggish growth before buying the stock. “This Stock Could Be Like Buying Amazon in 1997” See all posts by Nadia Yaqublast_img


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