Unilever is one of the most easily recognisable names in the world, with the company having fulfilled the needs of consumers worldwide for many decades. Founded in 1929, Unilever is the result of a merger between the Dutch company Margarine Unie, and the British corporation Lever Brothers. The company is headquartered in London, UK, and sells over 400 brands in over 190 countries around the world. Unilever has over a dozen billion-dollar brands (brands that rake in over $1 billion in annual sales). The company categorises its products into 3 main divisions: Foods & Refreshments, Beauty & Personal Care, and Homecare. Some of Unilever’s most popular products include Vaseline, Lifebuoy, Lux, Magnum, Knorr, Lipton, Vim, and Close Up.
Unilever has always been determined to expand and innovate its product portfolio. The company has a sizable research and development budget but has also been an active dealmaker seeking to make strategic acquisitions and divestitures that will streamline its focus and operations. Its most important buys include Dollar Shave Club, Best Foods, TAZO, and Alberto-Culver. Some of the notable sales include Upfield Europe BV, Alsa, and AdeS. In recent years, Unilever has shifted its focus towards sustainability, developing healthier products, and undertaking environmental-friendly operations.
Unilever is dual listed on the London Stock Exchange (ticker: ULVR) and the Euronext Amsterdam (Ticker: UNA). The company also has a secondary listing on the New York Stock Exchange (Ticker: UL).
ULVR Stock History
Since 2000, Unilever has implemented one stock split: a 1-for-5 on May the 25th 2006. Unilever’s stock performance has always mirrored its business, delivering stable returns that investors have enjoyed over the years. ULVR is quoted in pence on the LSE.
At the turn of the millennium, Unilever traded at circa 1000p, and after a brief drift lower, it embarked on a gradual rally that hit a peak just below 2000p in late 2007. As the global economy suffered the effects of the 2008 recession, the stock of the consumer giant took a slight hit and printed a temporary low at around 1300p. Since then, the stock gathered steam and maintained a largely upward trajectory that saw it print its all-time high above 5200p in August 2019. A brief price pullback followed, but it was overextended as the global economy was slowed down by the COVID-19 pandemic in 2020. The pandemic drove the stock to below 4000p, but ULVR took down the psychological resistance in 2021, and it continued to slowly but steadily push higher.
Unilever is a generous and willing dividend payer and it typically pays out over 50% of its cash flows to shareholders. This leaves plenty of room for increased payouts in the future, even as investors anticipate value appreciation for the stock.
How to Trade Unilever Stock?
Here are the factors to consider when trading ULVR Stock:
- Legislative and Taxation issues
Unilever’s product range is as wide as its geographical reach, making the company vulnerable to changes in legislative and taxation policies. The company completes over 400 income tax returns annually and has to continually face the threat of double taxation or disagreements with tax authorities in different jurisdictions. Governments also respond to health, social and environmental concerns by legislating more on consumer goods. Furthermore, Unilever has to deal with issues such as patents, counterfeits, intellectual rights, and even accounting standards.
Competition in the consumer goods industry is very fierce, with Unilever having to face threats from equally big and well-oiled companies, such as Proctor & Gamble, Nestle, Johnson & Johnson, and Mondelez International. An illustration of this fierce rivalry is the attempted hostile takeover of the company by Kraft Heinz, a competitor that is even smaller than Unilever. The competition also comes from local and traditional alternatives in the over 190 countries that Unilever operates in.
- Changing Consumer Preferences
No doubt that Unilever products are currently popular in the market, but consumer tastes and preferences can change in an instant and impact the company’s bottom line heavily. This, however, is both a threat and an opportunity. Unilever can continue to defend and advance its territory by investing heavily in research and development, as well as effective marketing and distribution. If the company reacts faster to consumer needs, it will be rewarded; but if it reacts slower than its competition, investors can punish its stock heavily.
- Periodic Earnings Reports
The Unilever fiscal year runs from January to December, and investors always watch out for the release of its periodic earnings reports. Important metrics to look for include revenues, dividends, and future guidance. Positive numbers will typically inspire higher ULVR prices, whereas negative figures will trigger a potential selloff.
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