Unilever is one of the world's largest suppliers of beauty products, personal care products, food products, and home care delivery in over 190 countries. The company provides services and products to more than 2.5 billion consumers every day.
If you're interested in Unilever's stock, this guide is for you! Find out more about Unilever's activities in these few lines.
History of Unilever PLC
On January 1 1930, the Dutch company Margarine Unie and the soap manufacturer Lever Brother merged to form Unilever. This Dutch-British multinational was then one of the first multinationals of consumer products in Europe. Its current name comes from the contraction of the names of the 2 brands : Margarine Unie + Lever Brothers.
Today, as a food giant, Unilever derives its sales from three segments :
- Sales of beauty products and personal care supplies: this segment accounted for 41.6% of its revenues in 2020, a decrease of 2.12% compared to 2019
- Food and ice cream sales: this segment accounted for 37.7% of its revenue in 2020, an increase of 0.55% over 2019
- Home maintenance: this segment accounted for 20.6% of its revenue still in 2020, a decrease of 2.09% compared to 2019.
Unilever is today one of the leaders in its sector. For this reason, its shares are taken into account in the calculation of numerous indices : AEX/ Euronext 100, FTSE 100, FTSE 350, FTSE All-Share, FTSE Eurotop 100, Stoxx Europe 50, STOXX Europe 600, Stoxx Global 200, Stoxx UK 50.
Introduction and listing of the Unilever share
The Unilever share is currently listed in Amsterdam under two names: DR and OS. The company's annual turnover is about 50 billion. Thanks to its ever-increasing performance, Unilever's dividend has been increasing for over 35 years, making it one of the most attractive European companies in terms of yield.
Another point to note is that the company's share price has increased threefold between 2008 and 2017. Quite an astonishing fact given the difficulty of agribusiness companies to gain market share.
Part of this success is due to the popularity of the brands owned by Unilever, which include Magnum, Knorr, Dove, Axe and Lipton.
Advantages and disadvantages of the Unilever share
Despite the company's good performances in recent years, it is still difficult to say with any precision whether or not to invest in Unilever shares. Many factors could lead to a decline of this asset in the near future.
Unilever's greatest strength is the diversity of its brands. The company owns many popular brands. Increasing the popularity of these brands would allow Unilever to easily gain market share. A good advertising or sales strategy for a high-potential product can help achieve this goal.
Secondly, Unilever's strategy over the last few years of increasing its product ranges in order to expand its market is more than beneficial.
Finally, Unilever's strategy of economies of scale allows it to offer its products at very attractive prices.
Unilever's main weakness is related to the nature of its products. Indeed, its products are easily imitable. It is therefore very easy to compete with Unilever.
Specializing in the production and sale of consumer goods is also a major handicap. Its main competitors, including Coca-Cola, Danone and Kraft Foods Group, are constantly increasing their presence in many other sectors.
The fact that it relies heavily on an external distribution network limits its scope for development. This prevents it from having a direct influence on its consumers.