Unilever PLC (UL)

It got an upgrade today from UBS, and rose 3.7%. The consumer space is getting killed by e-commerce, but Unilever has countered this trend by making strategic acquisitions. Last 5 years, total returns have been 15% vs. P&G's 2%. Unilever has mroe than 50% of its products in emerging markets which trust brands, so they can grow. Beta is low, because they deal in consumer staples. Has owned it for a long time.

They owned the stock for a number of years. It is a play on the consumer in the emerging markets. There is strong secular growth there. Per capita income growth is increasing. Global brands like Dove, etc. Yield of 3.3% (Analysts’ price target is $60.50)

This company falls into the “busted brand” category, he thinks. Sales are going down on organic products and there are small niche brands carving out market share. He thinks the market is entering a new world.

A great company, but he prefers to own North American companies. If you do own it, it's one of those companies were you just put it away and forget about it. They definitely have to cut their cost structure, which would be a benefit for them.

He believes in the stock. You are getting earnings growth of roughly 10% a year, and revenue growth anywhere from 2% to 4%. They are a little on the low side now, but just sold off their spreads business, so they have $6 billion in cash. Their strategy going forward is to have subsidiaries which are high margin/high growth. They want to reduce costs and overhead, and get margins higher so that they can a) pay down some debt and b) continue the dividend growth and c) capture more e-commerce markets. 43% of revenues are in Asia, and nobody else is close.

Has held this for a number of years and thinks the emerging markets are beginning to stabilize. 57% of sales comes from emerging markets, and their target is to have 75% by 2020. The middle-class is growing, and as that happens, they will consume more of this company's products. They have homecare, personal care, beverages. Adopted zero based budgeting 2 years ago Dividend yield of 2.8%. (Analysts' price target is $60.)

If looking at the consumer product space, this is the one you want to focus on. This has 43% of revenues coming from Asia. On a broad scale, all the consumer product companies are running into a problem in that they have lost 3% of the global market share to e-commerce start-ups. Their focus right now is to cut costs. They’re starting to make acquisitions in areas that are higher margins, and where they have an e-commerce presence and can start to protect their turf.

A safe European stock?If you want growth in a dividend and a consumer products company, this one is head and shoulders above the others. They are the biggest consumer products company in India and China, which has the kind of population growth that this company can take care of. They are also getting more involved in e-commerce, which the others are not.

About half their business comes from Asia, South America and the Middle East. A great company and very well-run. A good quality, global consumer product company that gives you an indirect exposure to emerging markets. Valuation is a little rich for the growth profile that you are getting. Prefers the more local players. Dividend yield of 2.6%.

A stock of 2 parts. 50% is emerging markets and 50% is developed markets. In the last 5-6 years, where emerging markets were the darlings, this was one of the “go to” stories. Now we have a situation where the US is recovering and markets are improving. We are starting to see a little more growth and upside in Procter & Gamble. You have a very good total return story here. If you have long-term money, this would be one to buy and hold for a total return story. However, if you are looking to trade he would go elsewhere.

This is the European version of Procter & Gamble (PG-N). It’s a big consumers product company and they make all kinds of pretty much everything you can think of. Overall, it’s okay, but keep in mind it is a defensive kind of name, and probably won’t do as well in a pro-growth environment that we are in right now.

When the financial crisis happened, the stock was a darling because the emerging markets were running. This company is effectively a 50% emerging market and 50% developed market. Then the US started to recover and that sort of lost its gleam. He likes the stock. You want to buy this at a point in the cycle where staples are not super in favour. He thinks that is starting to happen.