1 Consumer Defense Stock to Buy Without Any Hesitation Right Now | Entrepreneur (2025)

Despite macroeconomic uncertainties, the consumer defense industry is expected to remain buoyed in the foreseeable future, owing to its non-cyclical demand. Hence, consumer defensive stock Unilever (UL), having strong fundamentals and a robust outlook, could perform well in the upcoming months. Therefore, this stock might be a solid buy now. Read on….

Despite macroeconomic headwinds, consumer disposable income remained high in the United States, increasing to $18.98 trillion in December 2022 from $18.90 trillion in November 2022. Moreover, advance retail sales for the last month rose 3%, far more than the expected 1.9%, suggesting consumers' incessant spending despite an uptick in inflation.

Moreover, conventionally consumer defense stocks are good hedges against market volatilities owing to stable demand for the goods. Consumer defensive company Unilever PLC (UL), headquartered in London, the United Kingdom, operates through the broad segments of Beauty & Personal Care; Foods & Refreshment; and Home Care.

UL recently announced the appointment of Hein Schumacher as its new Chief Executive Officer, following an extensive, global search process. The move was also cheered by other investors and analysts, who have felt in recent years that UL needed an outsider's touch.

The company expects 2023 underlying sales growth to be at least in the upper half of its multi-year range of 3% to 5%. Also, with cost inflation remaining high, the underlying operating margin is expected to be around 16% in the first half of 2023.

The stock has gained 8% over the past six months and 6.2% over the past three months to close the last trading session at $51.20, higher than its 50-day and 200-day moving averages of $50.68 and $47.23, respectively.

Here are the factors that could influence UL's performance in the upcoming months:

Solid Financials

For the fiscal year that ended December 31, 2022, UL's turnover rose 14.5% year-over-year to €60.07 billion ($6.42 billion), with an underlying sales growth of 9%. Its operating profit increased 23.6% year-over-year to €10.76 billion ($11.50 billion).

UL's net profit stood at €8.27 billion ($8.84 billion), up 24.9% from the previous year, and its earnings per share increased 28.9% from the year-ago period to €2.99 for the same year.

Attractive Dividend

On February 9, 2023, UL declared a quarterly dividend of €0.4268 per share, payable to the shareholders on March 21, 2023. Its forward annual dividend of $1.83 translates to a 3.57% yield on the current price. Its dividend payments have grown at a CAGR of 2.9% over the past five years.

The company has a four-year average dividend yield of 3.47%. Also, it has paid dividends for 12 consecutive years.

Discounted Valuation

In terms of forward non-GAAP P/E, UL is trading at 18.73x, 3.4% lower than the industry average of 19.49x, while its forward EV/EBIT of 15.09x is 2.5% lower than the industry average of 15.47x.

Robust Profitability

UL's trailing-12-month gross profit margin of 100% is 217.1% higher than the industry average of 31.53%. Also, the company's trailing-12-month EBITDA margin and net income margin of 19.06% and 12.72% exceed the respective industry averages of 10.55% and 4.12%.

UL's trailing-12-month ROCE and ROTA of 42.31% and 9.82% are higher than the respective industry averages of 10.40% and 3.73%.

POWR Ratings Reflect Promising Prospects

UL's POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which translates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. UL also has a B grade for Value, in sync with its lower-than-industry valuation. Also, it has a B grade for Stability, consistent with its five-year beta of 0.14.

UL is ranked #4 of 58 stocks in the Consumer Goods industry.

Beyond what we've stated above, we've also rated UL for Growth, Sentiment, Quality, and Momentum. Get all UL ratings here.

View all the top stocks in the Consumer Goods industry here.

Bottom Line

Amid a volatile economic scenario, UL as a consumer defensive stock should benefit, owing to its non-cyclical demand. Moreover, given the company's promising financial results for the previous fiscal year and attractive dividend payouts, investors might buy the stock without hesitation to ensure a steady passive income.

How Does Unilever PLC (UL) Stack up Against Its Peers?

While UL has an overall B rating in our POWR Ratings system, one might consider looking at its industry peers Ennis, Inc. (EBF), which has an overall A (Strong Buy) rating, Kimberly-Clark de México, S. A. B. de C. V. (KCDMY) and Mannatech, Incorporated (MTEX), which have an overall B (Buy) rating.

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UL shares were unchanged in premarket trading Monday. Year-to-date, UL has gained 1.69%, versus a 6.49% rise in the benchmark S&P 500 index during the same period.


About the Author: Sristi Suman Jayaswal

1 Consumer Defense Stock to Buy Without Any Hesitation Right Now | Entrepreneur (1)

The stock market dynamics sparked Sristi's interest during her school days, which led her to become a financial journalist. Investing in undervalued stocks with solid long-term growth prospects is her preferred strategy.Having earned a master's degree in Accounting and Finance, Sristi hopes to deepen her investment research experience and better guide investors.

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1 Consumer Defense Stock to Buy Without Any Hesitation Right Now | Entrepreneur (2025)

FAQs

What are the best defensive stocks to buy? ›

  • Progressive Corp. ...
  • Trane Technologies plc - Ordinary Shares - Class A TT. ...
  • Taiwan Semiconductor Manufacturing - ADR TSM. Price $160.01. ...
  • Sap SE - ADR SAP. Price $209.2. ...
  • KLA Corp. KLAC. ...
  • Cintas Corporation CTAS. Price $764.86. ...
  • American Express Co. AXP. ...
  • Apollo Global Management Inc - Ordinary Shares - Class A (New) APO. Price $122.06.

What are examples of consumer defensive? ›

Companies in this sector manufacture food, beverages, household and personal products, packaging, or tobacco. Consumer defensive companies also provide education & training services.

Is McDonald's consumer defensive? ›

A Specific Example

Really great examples of defensive stocks include those that cater to lower-income populations or provide cheaper goods and services than most. For instance, take McDonald's.

What is a defensive stock? ›

A defensive stock is a stock that provides consistent dividends and stable earnings regardless of the state of the overall stock market. Well-established companies such as Procter & Gamble, Johnson & Johnson, Philip Morris International, and Coca-Cola are considered to be defensive stocks.

Which are the best defence stocks to buy? ›

List of Top Defence Stocks in India
  • Hindustan Aeronautics Ltd.
  • Bharat Electronics Ltd.
  • Data Patterns.
  • Bharat Earth Movers Limited (BEML)
  • Paras defence and Space Technologies.
  • Taneja Aerospace and Aviation.
  • Mazagon Dock Shipbuilders.
  • Bharat Dynamics Ltd.

What are the 10 best stocks to buy right now? ›

Sign up for Kiplinger's Free E-Newsletters
Company (ticker)Analysts' consensus recommendation scoreAnalysts' consensus recommendation
ServiceNow (NOW)1.49Strong Buy
Assurant (AIZ)1.50Strong Buy
Howmet Aerospace (HWM)1.50Strong Buy
Insulet (PODD)1.50Strong Buy
21 more rows

Are defense stocks a good buy? ›

Defense and aerospace companies can be underrated long-term investments. A handful of power players dominate the industry, enjoying competitive advantages thanks to their constant innovation, deep pockets, and strong ties to the U.S. government and its allies.

What are the top consumer discretionary stocks? ›

577 Stocks
No.SymbolCompany Name
1AMZNAmazon.com, Inc.
2TSLATesla, Inc.
3HDThe Home Depot, Inc.
4TMToyota Motor Corporation
64 more rows

What are the blue chip stocks? ›

Blue-chip stocks are well-established, have strong financial numbers and often have name recognition. Large market capitalization. Market cap is a measure of the size and value of a company. Blue-chip stocks are often large-cap stocks, which typically means they have a market valuation of $10 billion or more.

Is Amazon a consumer discretionary stock? ›

Amazon (AMZN) is generally seen as a tech stock, but it's technically also a consumer discretionary stock, as it's a member of the internet retailing industry.

Is it a good time to invest in consumer discretionary? ›

When the economy is expanding, consumer discretionary stocks tend to see strong gains. They are what's called cyclical stocks because they are directly dependent on economic cycles and consumer confidence. During good economic times, consumers are ready to spend on discretionary items.

Is Apple a consumer discretionary stock? ›

As examples, some names you might recognize include: Procter & Gamble (PG), Costco (COST) and Dollarama (DOL:TSX). Some companies may look like they fit into a discretionary category, but technically don't, such as Apple (AAPL), which falls under the Information Technology sector's consumer hardware industry.

What is the best defensive stock to buy? ›

Largest Companies in This Sector
NameLast PriceAvg. Analyst Rating
WMT Walmart Inc.68.64Buy
PG The Procter & Gamble Company160.76Buy
COST Costco Wholesale Corporation822.00Buy
KO The Coca-Cola Company66.74Buy
6 more rows

What are the best undervalued stocks to buy? ›

Top Undervalued Stocks in India 2024
NamePriceROCE
ITC Ltd₹489.9037.4%
Asian Paints Ltd₹3,005.0538.97%
Sun Pharmaceuticals Industries Ltd₹1,701.6012.22%
Avenue Supermarts Ltd₹5,027.2019.93%
6 more rows

Is Walmart a defensive stock? ›

Walmart's defensive characteristics certainly came in handy in 2022. The S&P 500 generated a total return (price change plus dividends) of -18.1%, a historically bad result. On the other hand, Walmart's total return came to -0.5% – or essentially flat – to beat the broader market by more than 17 percentage points.

Are defense stocks a good investment? ›

Defense stocks offer a combination of steady growth and income. The industry ebbs and flows with government spending. Over the years, defense companies have been a hotbed for the development of new tech.

What is the most secure stock to buy? ›

Dividend stocks are considered safer than high-growth stocks, because they pay cash dividends, helping to limit their volatility but not eliminating it. So dividend stocks will fluctuate with the market but may not fall as far when the market is depressed.

What stocks to buy if war breaks out? ›

In general, defense stocks (companies that produce weapons and armaments) tend to fare the best during a wartime environment.

What are the best defensive assets? ›

Defensive asset classes such as cash, gold and Treasury bonds play an important role, providing benefits of diversification that can help you weather these inevitable periods of market volatility.

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