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)
- Unilever is certainly faced with challenges going into 2023 as the cost of raw materials, energy, and transportation remain at sky-high levels, consumers in some markets cut back on spending in reaction to the economic environment, and the company begins to look for a new CEO to replace Alan Jope.
- Yet, in some ways the company is looking as attractive for investors as it has in years. Growth is finally the lodestar for management, volumes are down only moderately despite aggressive price hikes to recoup inflationary cost increases, and activist investor Nelson Peltz, who has had success in the consumer goods space, has joined the board and should influence the company in a shareholder-friendly direction.
- Plus, Unilever and the goods it sells are more defensive than most businesses out there. Downside limitation is attractive in times like these.
- Unilever’s valuation of circa 21 times trailing earnings is not cheap but if the company can deliver on promised growth targets in the medium-term, begin to rebuild margins through price hikes, and deliver more cash to shareholders it could be an attractive one.
