A strong performer from today's morning trading session is Unilever PLC, whose shares rose 1.2% to $62.52 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
a Very Low P/E Ratio but Trading Above Its Fair Price:
Unilever PLC operates as a fast-moving consumer goods company in the Asia Pacific, Africa, the Americas, and Europe. The company belongs to the Consumer Discretionary sector, which has an average price to earnings (P/E) ratio of 22.15 and an average price to book (P/B) ratio of 3.11. In contrast, Unilever PLC has a trailing 12 month P/E ratio of 21.3 and a P/B ratio of 7.68.
Unilever PLC's PEG ratio is 3.79, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
Generally Positive Cash Flows but Not Enough Current Assets to Cover Current Liabilities:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $50,982 | $51,980 | $50,724 | $52,444 | $60,073 | $59,604 |
| Gross Margins | 44% | 44% | 43% | 42% | 40% | 42% |
| Net Margins | 19% | 12% | 12% | 13% | 14% | 12% |
| Net Income (M) | $9,788 | $6,026 | $6,073 | $6,621 | $8,269 | $7,140 |
| Net Interest Expense (M) | -$608 | -$627 | $1,193 | -$354 | -$493 | -$486 |
| Depreciation & Amort. (M) | $2,008 | $1,964 | $2,018 | $1,746 | $1,725 | $1,578 |
| Diluted Shares (M) | 1,187 | 1,169 | 2,629 | 2,629 | 2,629 | 2,521 |
| Earnings Per Share | $3.48 | $2.14 | $2.12 | $2.32 | $2.99 | $2.56 |
| EPS Growth | n/a | -38.51% | -0.93% | 9.43% | 28.88% | -14.38% |
| Free Cash Flow (M) | $7,318 | $8,109 | $9,058 | $7,972 | $7,282 | $9,426 |
| Current Ratio | 0.77 | 0.78 | 0.78 | 0.7 | 0.75 | 0.76 |
Unilever PLC has slimmer gross margins than its peers, declining EPS growth, and not enough current assets to cover current liabilities because its current ratio is 0.76. On the other hand, the company has generally positive cash flows working in its favor.
