Unilever: Steady Record of Profits, Dividends

Diversifying your stock holdings by adding companies with well-developed overseas interests and revenues sources is a wise decision for U.S. investors – especially in current market conditions.

Just as valuable is a steady track record of profits – and dividends.

With this in mind, my TFN Hot Stock Pick for this week is a Netherlands-based company with facilities in more than 100 countries and over 170,000 employees: Unilever.

Basic needs are recession-proof

Let me tell you, no matter what happens to my income, I NEED mayonnaise – no sandwich is complete without it. My brand of choice? Hellman’s, of course. (Is there any other?)

Hellman’s, as it happens, is one of Unilever’s 400 brands in 14 categories of food, home, and personal care products sold all over the world.

Tired of reading? Watch the video.

We’re talking brands as diverse as Lipton, Suave, Ben & Jerry’s, Skippy, Q-Tips, Promise, Slim-Fast, Popsicle, and Vaseline.

The five Unilever laboratories are always working hard to create more essential products for our personal consumption.

The company covers our hygiene needs from facilities like those located here in Baltimore City, where it manufactures Dove, Wisk, all, Final Touch and Snuggle.

Promising ad campaign for beauty products

Speaking of Dove, just this month, the company announced the launch of its Dove Digital Channel (www.dove.com) thereby expanding it Campaign for Real Beauty to new interactive levels.

If the viral videos stemming from this refreshingly unique marketing approach are any indication, it should be a success. (If you haven’t seen one, go to YouTube and type in “Dove Evolution” – or follow this link – it’s fascinating).

The benefits of globalization

2007 saw almost 40% of Unilever’s revenue come from Europe, just over 30% from the Americas, and just under that percentage from Asia and Africa.

Commodity costs have certainly affected Unilever’s bottom line – yet sales increased by 1.7% due to increased prices and as well as volume growth in the last quarter of 2007.

Especially promising markets for Unilever continue to be the usual suspects – China and India – but also emerging markets like Vietnam and Turkey.

Get in for the dividend

This is a reliable stock to turn to in shaky market conditions and a realistic expectation of semi-annual dividends lends appeal to this stock. The December interim payout was just over 36 cents a share. The year before, the dividends averaged a little over 63 cents.

With its continued research, global expansion, marketing savvy and dividend payouts, I recommend you buy Unilever N V NY (the New York Shares) – ticker symbol (UN) – at or under $36 a share before the next ex-dividend date of May 19. There may be a slight drop in share prices of up to 5% after that date – an excellent opportunity for experienced investors to use the leverage of an options hedge strategy.

Disclosure: None

Comments

[Ames Tiedeman:]

This is the kind of company you buy and just never sell.

2008 Apr 18 09:22 AM

[granger:]

Great company. I have a friend thatt has worked at Unilever here in the states for many years. His 401(k) holdings are balanced % diversified. But keeps 20% towards UN and always take advanatge of buying after tax stcok ata discount when offered.

Luckily his employment there made me aware of this company, so i have accumulated also over the year.

This is definitely a long term keeper. It is a great diversifier in a portfolio. Gives global exposure. Managment has consisently performed and rewards shareholders over the decades. My kind of company.

2008 Apr 20 02:10 PM