Unilever PLC (UL)

(Top Pick Mar 18/16, Up 16%) 55% in emerging markets and they are moving more into higher margin personal care products.

(A Top Pick Jan 17/17. Up 22%.) He feels consumer staples, particularly now, is an important spot in your portfolio.

She has owned UL-N for 4 years. She thinks the price is significantly too low. She owns it because 15% of revenues is from emerging markets. That is where the growth is in consumer goods.

They really pushed into a lot of the emerging markets and spent a lot of SG&A and did not really get the benefit out of it. They have so many products and some are not generating the rate of return that is required of them, but they have still kept them on. If they start selling them off you could see improved margins.

One of those companies that serially raises its dividend. If you are looking for dividend protection and dividend upside, this is your kind of company. About 3 years ago, emerging markets was the big story. 50% of their Book is emerging markets, and 50% is with a developed economy. It’s corrected nicely and would offer some entry, but at the moment, the rotation out of safe stocks is playing on this story. There might be a little more downside. The business is solid.

He likes this because it is the 3^rd largest globally with 57% personal products and 43% consumer food items. If there is any weakening in the dollar, you are going to see this company improve their performance. 50% of revenue is coming from emerging markets, so this is a growth area. Dividend yield of 3.42%. (Analysts’ price target is $36.72.)

A great company and a solid one. He has reduced his exposure to consumer staples. Also prefers Nestlé (NSRGY-OTC). For the last 7 years, consumer staples have been doing very, very well. Feels the cash flow multiples are on the high end right now. If we start to see the growth in the US economy start to pick up, there are other places he would rather be.

Has held this in her clients’ portfolios for a number of years. She owns this for its exposure to emerging markets, the consumer packaged goods. Over 60% of revenues are from emerging markets. A lot of the economies in emerging markets have been going through a difficult time, so this is affecting them. Given the pullback, it is an opportunity. Long-term, this is where their secular growth is. They have been expanding into personal care, which tends to have higher margins than the packaged foods business. Has an attractive yield of over 3%.

(Market Call Minute.) Expensive. There are a lot of other places to invest in the market.

A great company. One of the unique things is that they have accumulated brands all over the place, and then went aggressively into emerging markets. Many brands were not making money, and they sold those off. They still have to do a little more. They realize they were not making much money in emerging markets, so they need to reassess what products are going to be doing well, and how much to spend to market them. Thinks they are at that stage now. Expects in the next little while you will see margin improvement, especially on the emerging-market products.

Pays a very generous dividend. Right now consumer staples are really taking it on the chin, and have had it bad since interest rates started moving up in July. This has sold off partly because of BREXIT. In terms of unit sales globally, their sales are actually going up by 1%-2% per year. That is good and means the company is going to be okay. It wouldn’t be a bad idea to start adding this to your portfolio.

(Market Call Minute.) Has held this for a long time and is continuing to Buy it, as they have e-commerce picking up with shaving and diapers.

Outside of North America, 50% of the company’s revenues come from emerging markets and 50% comes from developed markets. Has a very good dividend and has grown its dividend. Feels the dividend is safe. They are getting to a point where they are probably going to do an acquisition. If you hold this for 10 years, you are going to be fine. However, if your time frame is less than that, you definitely get a great dividend, see some downside, but definitely not the kind of upside that potentially could be offered in other segments.

Owns a little bit of this. It has benefited from money pouring into consumer product companies. However, the valuation is starting to get too high. He wouldn’t sell it, but wouldn’t buy any more.

This gives you Ben & Jerry’s ice cream, Lipton tea and personal care products. The stock hasn’t moved a lot this year, up about 2%, but you’re getting growth in the dividend over time, because as free cash flows grow, you are getting almost a 10% increase in the dividend every year. They are going to pick up a lot of emerging market growth, more so in India than they are in China.