Unilever (UN - Free Report) is in the midst of a strong run that has seen its shares skyrocket to a new all-time high. New highs can sometimes cause investors to hesitate because they assume a stock will settle down, but our Zacks Style Scores can help investors find stocks that are still poised to grow, even as they sit near their historical peaks.
Almost any investor could benefit by sticking to stocks with strong Zacks Ranks and high grades in our Style Scores systems. But for growth investors, it takes much more than simply looking for stocks with the highest growth rates. Understanding and evaluating quality is essential as well.
This is where the Growth category of the Style Scores system comes into play. This category not only analyzes the growth prospects of a company, but also evaluates its corporate financial statements.
Studies have shown that stocks exhibiting the best growth characteristics consistently outperform the market, and if investors add a strong Zacks Rank on top of those growth fundamentals, the returns are even better.
With that said, let’s take a look at Unilever, a high Zacks Rank stock that also grades out well in terms of Growth and Momentum in our Style Scores system.
Unilever N.V. (UN - Free Report)
Shares of the Anglo-Dutch consumer packaged goods giant, which owns brands such as Dove, Lipton, Ben & Jerry’s, Degree Deodorant, and many more, started to soar after a $143 billion merger attempt from Kraft Heinz (KHC - Free Report) failed to go through.
Since then, Unilever’s stock price has shot up 47.59% year-to-date and now rests just below its all-time high of $60.81 per share, which it hit on Sept. 11.
Unilever has flexed its muscles since the merger failed. The company posted a 22% increase in net profits during the first half of its fiscal year, and it has begun to bolster its brand portfolio by adding companies such as British-based organic tea maker Pukka Herbs, which helps Unilever as consumers look for more eco-friendly and healthy options.
The London-headquartered company is currently a Zacks Rank #1 (Strong Buy). Unilever also sports an “A” grade for Growth in our Style Scores system, as well as an overall VGM grade of “A.”
Unilever’s projected EPS growth of 31.97% blows out the industry average of 7.71% and crushes Proctor & Gamble’s (PG - Free Report) 6.46%. The company also outpaces the industry with projected sales growth of 9.11%. Unilever’s 30.73% cash flow growth also helps to show that the company is on a solid growth trajectory, especially compared to the industry’s 7.28% average.
The company also earned an “A” grade for Momentum in our Style Scores system. This metric helps to indicate when the timing is favorable to enter a stock in order to take advantage of the momentum with the highest probability of success.
Unilever’s Zacks Rank #1 (Strong Buy) ranking and it’s “A” grades for both Growth and Momentum help demonstrate that the company is in a solid position, both today and going forward. Despite recently hitting a new all-time high, the CPG powerhouse might just be a stock to consider.
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