Unilever: Sales Growth Rebounded In Q1; 3.4% Dividend Yield (Preview)
Company Update (ULVR LN) (Buy)
Summary
Unilever's underlying sales growth rebounded to 5.7% in Q1 2021, though with a number of different moving parts due to COVID-19.
There was real growth in every region except Europe, and growth was genuine even taking currency headwinds into account.
Unilever's competitiveness has continued to improve, recent acquisitions are starting to help accelerate growth, and disposals are on track.
A new €3bn buyback program was announced, and more is likely when planned disposals are completed; the dividend is maintained.
With shares at 4,294p, we expect annualized returns to be between high-single-digits and low-teens, including a 3.4% Dividend Yield. Buy.
Introduction
We review our Unilever investment case after a Q1 2021 update was released on April 29. We initiated a Buy rating on Unilever in December 2020. Unilever stock is now 2.9% lower (in U.K. pounds), and offers a 3.4% Dividend Yield.
The Q1 update contained different moving parts, but overall it supports our investment case, which in…