Last week, Unilever plc (ADR) (UL) posted mixed fourth-quarter results.
Is this a sign of tough times for UL or could this be a good buying opportunity?
Unilever – Company Overview
Unilever is a consumer goods company that was founded 130 years ago. The London-based Unilever sells products in Asia, Africa, Europe and the Americas.
Unilever is most famous for its product portfolio with over 400 brands including Ben and Jerry’s, Dove, Axe and Bertolli. Unilever also pays out an impressive 3.4% dividend yield to shareholders.
Unilever – Earnings Rundown
In the fourth quarter, Unilever, reported weaker-than-expected underlying sales growth at 2.1%. Unilever experienced slowed growth toward the end of last year. Sales weakened in emerging markets, especially in China, where sales dropped nearly 20%. Despite fallbacks, overall fiscal year 2014 results were solid.
Earnings-per-share was up by 8% to € 1.79, compared to € 1.66 last year, and full year underlying sales rose 2.9%. Looking ahead to 2015, Unilever expects sales to remain stagnate.
According to CEO Paul Polman, Unilever does not “plan on a significant improvement in market conditions in 2015” and expects the first quarter to be “softer.”
Unilever – Current Ratings
Before you buy any stock, you should always run it through my free Portfolio Grader ratings system. UL stock, a conservatively-ranked stock, has fluctuated from “sell” to “hold” to “buy” ratings over the past 12 months.
Currently, UL stock is rated a buy partly because of Unilever’s solid buying pressure. UL stock receives a B for its Quantitative Grade. Meanwhile, Unilever’s fundamental metrics could improve. Of the eight fundamental metrics I graded Unilever on, it earns D grades for sales growth and analyst earnings revisions.
UL also receives lackluster C grades for earnings momentum and earnings surprises. UL excels in cash flow and return on equity, earning A-grades, while earning solid B-grades for operating margin growth and earnings growth. So, UL stock receives just a B for its overall Fundamental Grade.
As of this posting, I consider UL stock a B-rated (Cautious) “buy.”
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
