2022 has been a surprisingly good year for blue-chip UK shares with the FTSE 100 defying the global downturn. Wall Street crashed but London did not burn.

Now the FTSE 100 has started to rise, up 6.55% in the last month. Year to date, it is broadly level. I am happy because I embarked on a buying spree recently, purchasing Persimmon, Rio Tinto, and Rolls-Royce in short order. 

At the time, the FTSE 100 had dipped below 7,000, and I thought they looked unmissable value. These are early days but so far, I feel vindicated. All three are up 10% or more since I bought them.

UK shares are on the up

I am keen to add to my recent purchases, and a number of top stocks are now lined up on my watchlist.

These days I am mostly buying dividend stocks. Ideally, those trading at low valuations with high dividend income yields. Aviva is near the top of my shopping list, with Unilever close behind. Both UK shares are market stalwarts, that I would be happy to buy at any time. But I would particularly like to buy when they are trading on low valuations, and offer maximum possible dividends.

Yet as I write this, the FTSE 100 has climbed to 7,475. While it still looks cheap, it is not as cheap as it was a month or so ago. The same applies for Aviva and Unilever, whose share prices have jumped 9.29% and 4.93% respectively over the last month.

Both stocks still look good value to me. Particularly Aviva, which is trading at 8.09 times earnings (a P/E of 15 is considered fair). Unilever looks more expensive, trading at 18.30 earnings, but for years it rarely fell below 24 times.

They were cheaper a month ago but sadly, I cannot go back in time and buy them at the old price. I could always delay my purchases, I suppose, crossing my fingers and hoping the FTSE 100 will fall back to where it was.

However, experience tells me that hanging on for the perfect time to buy is a mug’s game. For some reason, it never seems to arrive. There is another disadvantage to waiting. The FTSE 100 may climb higher, as could the Aviva and Unilever share prices. 

Always a good time to buy FTSE 100 stocks

Another downside to hanging around is that my money will sit idly in the bank earning next to nothing while I wait for the ideal moment to invest. Also, I will also miss out on any dividends these stocks pay in the interim.

When I buy FTSE 100 stocks, I aim to hold them for a minimum of 10 years, and ideally much longer than that. It’s nice to buy at the bottom of the market, but given that lengthy investment timeframe, hardly essential.

Aviva is a solid business but the attraction is the dividend, rather than share price growth. Unilever still has a long haul ahead of it, before it recovers recent glories. The real benefits of buying either stock will be measured over years, rather than weeks.

So forget that they were a bit cheaper a few weeks ago. What really matters is that both these UK shares still look good value today. I will buy them as soon as I have the cash.

The post UK shares still look cheap despite the stock market rally. I’d buy these 2 now appeared first on The Twelfth Magpie.

More reading

• 3,566 shares in this FTSE 100 stalwart earns a £1,443 second income
• A £10,000 ISA buys 1,931 shares in these 6.5%+ yielding dividend stocks!
• 3 top passive income shares to consider with dividend yields above 5%
• How much do you need in a SIPP to target a stunning £750.75 weekly passive income?
• How to turn a £20k ISA into a £12,000 yearly second income

Harvey Jones holds shares in Persimmon, Rio Tinto and Rolls-Royce. The Motley Fool UK has recommended Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

I remember when Unilever (LSE: ULVR) was arguably the most popular and admired FTSE 100 stock on the index. It wasn’t that long ago, either.

The packaged food and consumer goods giant was seen as a stock for all seasons. As a purveyor of soap, shampoo, bleach, sprays, and ice cream, sales rose when consumers were feeling flush. Yet revenues held up in the bad times, too, as people cut back on luxuries rather than Unilever’s low-cost everyday essentials.

I’m hunting for FTSE 100 stocks

Fundamentally, Unilever hasn’t changed. It still boasts a raft of huge global brands including Axe, Ben & Jerry’s, Dove, Lifebuoy, Hellmann’s, Magnum, Persil, Sunsilk, Vaseline and Wall’s. Customer numbers are soaring as emerging markets play catch up with the West.

What has changed is that management has lost its way. Critics have accused the board of pursuing a ‘woke’ agenda while failing to pay attention to the bottom line. Unilever also missed an open goal in the pandemic, by failing to boost hygiene and packaged food sales.

Its big shareholders are unhappy. Activist hedge fund investor Nelson Peltz acquired a stake in the wake of Unilever’s failed £50bn bid for GlaxoSmithKline’s consumer-health business, hoping to force change. He’s now on the board.

Peltz isn’t the only investor who thinks the business is in need of a shake-up. The Unilever share price certainly needs a fresh injection of life. It’s up just 1.6% in the past 12 months, and down 14% over three years.

It is struggling to make headway despite reporting an 8.1% increase in first-half underlying sales in July, as strong pricing offset input cost inflation. All four divisions delivered, and management expects underlying sales growth for 2022 to beat previous guidance of 4.5% to 6.5%.

Unilever appears to have pricing power, which has enabled it to hold full-year underlying operating margins within its guided range of 16% to 17%.

I’m a private investor, not an activist investor. I accept that Unilever needs an overhaul, but I still think the underlying business is strong. Personally, I would rather buy before it is on the mend, to take advantage of today’s highly tempting entry point.

I’ll buy Unilever this month

For years, Unilever has been trading at around 24 times earnings and yielding around 2.5%. Today, its valuation has dropped to 17.6 times earnings while its dividend yield is a halfway handy 4.4%, covered 1.5 times by earning.

Yes, the “medium-term macroeconomic and cost inflation outlooks are uncertain and volatile”, to quote Unilever itself, but that is partly reflected in today’s price.

I am currently hunting for FTSE 100 stocks at bargain prices, with the aim of holding them for at least 10 to 15 years. Having such a long perspective means I don’t have to worry about a company’s short-term problems.

So far I’ve bought FTSE 100 stocks Persimmon and I’m gearing up to buy Rolls-Royce. Once I get the cash, I’ll buy Unilever, too. Certainly before the month is out.

The post Here’s why I will buy this FTSE 100 stock in November appeared first on The Twelfth Magpie.

More reading

• 3,566 shares in this FTSE 100 stalwart earns a £1,443 second income
• 2 FTSE shares for beginners starting an ISA
• Is this former stock market hero now the ultimate FTSE 100 buy and hold?

Harvey Jones holds shares in Persimmon. The Motley Fool UK has recommended Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

If I had as much as £10,000 to pump into a Stocks and Shares ISA right now I’d be looking to load up on top FTSE 100 dividend shares.

After years of trailing major indices such as the S&P 500, London’s blue-chip index is showing it’s made for tough times. US tech stocks may have cashed in on the cheap money era, but FTSE 100 shares now offer bruised investors a welcome safety net.

Investing goes in cycles and the tech splurge lasted beyond its natural term. That came as central bankers piled on the stimulus during the Covid crisis. Now investors are prioritising ‘value’ stocks, dividend-paying companies trading at low valuations. 

My ISA line-up

The FTSE 100 is full of them and I’d start by exploring these 10 companies. All have risks, but offer big opportunities too.

Insurer Aviva has delivered little share price growth in recent years. But it’s a dividend aristocrat paying income of 9.95%. Trading at a dirt-cheap 6.8 times earnings, it’s hard to resist.

Barclays is even cheaper at just 3.7 times earnings, while yielding 4.28%. Sticking with financials, I also like Lloyds Banking Group, cheap at 5.5 times earnings with a 4.82% yield (and future dividend growth).

The financials sector is being shaken by the gilt crisis, while rising interest rates could squeeze both small business and retail customers. But I reckon those risks are reflected in their rock-bottom valuations.

I’d also include transmissions giant National Grid. Frankly, this is a stock I’d buy at any time, as a core portfolio holding. Today it yields 5.77% and looks fair value at 14.4 times earnings. It’s a solid long-term buy and hold for my ISA.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Higher yields

With that as security, I’d take a bigger punt and buy a housebuilder such as Persimmon that yields a ridiculous 19.37%. Although I expect the dividend to be cut sooner rather than later, that won’t be a disaster given today’s starting point. House price crash fears are priced in at a valuation of 4.9 times earnings. At least, I hope they are.

Mining giant Rio Tinto is the second highest yielder on the FTSE 100 offering 14.21% and trading at 4.2 times earnings. Chinese demand for commodities is slowing and the dividend may be reduced at some point. Now still looks like a great entry point for contrarians like me. I’d also consider gold miner Fresnillo. It may benefit when inflation easies, the US dollar softens and the gold price recovers.

Clothing retailer Next will obviously suffer as discretionary consumer spending falls. But it looks better placed than most, and I’d consider it for my ISA too. Then I’d buy Unilever, because I’ve never seen it this cheap at 17.2 times earnings (it’s usually around 24 times) while yielding 4.42%.

Finally, I’d include spirits giant Diageo in my top 10. Yes, it looks expensive trading at 24.1 times earnings while the yield is just 2.08%.But it’s a solid, recession-proof business and they come at a premium in these troubled times.

The post How I’d invest £10k in a Stocks and Shares ISA today appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Harvey Jones doesn't hold any of the shares mentioned in this article. The Motley Fool UK has recommended Barclays, Diageo, Lloyds Banking Group and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

As a retail investor, it’s been tough to navigate markets this year. While still feeling the side effects of the Covid-19 pandemic, we’ve also been hit with red hot inflation alongside the Russia-Ukraine conflict. However, this hasn’t deterred me from looking for investment opportunities. And in fact, I’m on the lookout for FTSE 100 stocks that I can hold for the long term.

Here are two I’d buy today and hold for years to come.

Consumer goods powerhouse

First on my radar is consumer good company Unilever (LSE: ULVR). The business owns over 400 brands, including the likes of Dove, Persil, and Sure. The stock has remained pretty much stagnant across the last 12 months, rising by just over 1%. In 2022, the stock is down under 1%.

While this may not seem great, given the economic conditions, this is fairly impressive, in my opinion. This year many stocks have seen sizeable chunks wiped off their market values. However, Unilever has been able to fight back against pressures such as inflation.

For me, this is important. And this is the case for a few reasons. Firstly, by buying Unilever shares I’m adding strong and recognisable brands to my portfolio. A third of the world uses Unilever products daily, highlighting the group’s everyday appeal.

What this also brings is, to a degree, pricing power. For the first half of the year, Unilever saw its revenue grow 8.1%, in part due to the 9.8% increase in prices for the period. This shows the business has the robustness to navigate difficult conditions. When looking for a long-term hold, this is a major attraction.

I also like the way Unilever is putting an emphasis on returning value to shareholders. This is predominantly in the form of a €3bn buyback scheme.

There are concerns I have surrounding the business, namely its debt. And with interest rates on the rise, this could spell further trouble. However, with its robust nature, I’d buy Unilever shares today and never look back.

Investment stalwart

My second choice would be Legal & General (LSE: LGEN). A financial and insurance services company, this year has seen it struggle. Despite rising 1% over the last six months, the Legal & General share price is down 15% year to date. Over the last year, it’s down 5%.

The main thing drawing me to this stock is its dividend yield. At the time of writing, this sits at an impressive 9.2%.

This hedges me to a large degree against inflation. And with plans to increase payouts in the future, the long-term outlook is also positive.

Like Unilever, Legal & General is a reputable brand. For the first half of the year, the business saw its operating profit and earnings per share rise by 8%. Within the period, it also made strides with its five-year (2020-2024) plan.

The months ahead could be rocky for the firm as consumers may be forced to cut back on spending. However, as a long-term buy, this short-term issue is of no concern to me. With an optimistic outlook, I’d happily buy some shares today.

The post 2 FTSE 100 stocks I’d buy for the long run! appeared first on The Twelfth Magpie.

More reading

• How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income?
• Here’s why I bought this 7.6%-yielding FTSE 100 dividend stock instead of saving in a Cash ISA
• 3,566 shares in this FTSE 100 stalwart earns a £1,443 second income
• How much would you need in a Stocks and Shares ISA to match the State Pension?
• Here’s a quick and easy way to start earning passive income this summer with a spare £1,000

Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

After what has been a difficult year, I’m on the lookout for FTSE 100 stocks that I can add to my portfolio and hold for the long run. The index has shown its resilience this year as its price has barely nudged. And when compared to the S&P 500, which is down over 10% in 2022, the top 100 UK companies by market capitalisation have shown their worth.

After analysing the index, here are two I have my eye on today.

Unilever

My first pick is consumer goods company Unilever (LSE: ULVR). The business owns over 400 household brands, including names such as Dove, Marmite, and Ben & Jerry’s. So far this year, the Unilever share price is down just over 1%.

My main attraction to the stock is that through buying it I’m adding a strong collection of brands to my portfolio. A third of the world uses its products on a day-to-day basis, highlighting their must-have status and therefore, to some extent, Unilever’s pricing power.

For the first half of the year, revenue grew 8.1% for the business. Yet despite this rise, volume fell by nearly 2%.

This was possibly due to the fact Unilever increased its prices by 9.8% for the period amid rising inflation. With growth being “driven by strong pricing to mitigate input cost inflation,” this shows the firm is capable of tackling surging costs.

On top of this, it’s also made headway in its €3bn two-year buyback scheme, with the aim of launching the second tranche of this in the third quarter.

What does concern me is its debt, and more specifically, rising interest rates on this debt. With the interest rate on average net debt rising from 1.4% last year to 1.9% this half, an already substantial pile has now become more difficult for Unilever to eradicate.

However, I’d still buy Unilever shares today. Its strong brand recognition allows it to fight back against pressures such as inflation. And with moves like buybacks, I’d buy today and hold for the long term.

BAE Systems

My second choice is the arms and security business BAE Systems (LSE: BA). In a year when many have suffered, the FTSE 100 stock has bucked the trend, rising 44% year to date.

The main catalyst for the rise has been the tragic war in Ukraine. While this war alone will drive business for the firm, more widely it’s sparked defence concerns among European countries. As such, BAE’s products have been in higher demand.

For the first half of the year, the company saw underlying profits grow by 8.2%. It also expects up to 4% growth in sales for 2022.

Within its latest update, CEO Charles Woodburn stated that BAE sees “further opportunities to enhance the medium- and long-term outlook as our customers commit to increased defence spending to address the elevated threat environment.”

Like Unilever, BAE is running a buyback programme of up to £1.5bn. With it also increasing interim dividends, these are positive signs for me.

The business may face supply chain pressures in the months ahead and with inflation rising this will more than likely push up the cost of materials.

However, with a strong long-term outlook, I’d happily buy today.

The post 2 FTSE 100 stocks I’d buy and hold! appeared first on The Twelfth Magpie.

More reading

• 3,566 shares in this FTSE 100 stalwart earns a £1,443 second income
• Is now the perfect time to buy Rolls-Royce, Babcock and BAE System shares?
• 1 FTSE stock tipped to handily outdo Rolls-Royce shares by 2027
• Forget SpaceX, here are 3 UK tech stocks to consider buying without the high price tag
• Should investors consider buying BAE Systems shares now they’re back below £20?

Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

July’s UK consumer price index (CPI) came in hotter than expected at 10.1%. This is a 40-year high and has the potential to drive share prices further down as consumers struggle with a cost of living crisis. So, here are five shares I’m considering buying.

Lloyds

As the UK’s biggest lender, I believe Lloyds (LSE: LLOY) shares are a sound choice for my portfolio. It earns its money from the difference in providing and earning interest from loans. This is otherwise known as net interest income.

Interest rates are expected to go as high as 3% by 2024 as the Bank of England tries to combat inflation. As a result, the high street bank should get a top-line boost from higher lending costs, while benefiting from lower interest paid to customers. With enough cash to set aside for bad loan provisions, Lloyds doesn’t need to increase its savings rate to bring in more cash, thus allowing it to increase its profits. This was evident in the company’s latest half-year results, which saw it recording excellent numbers.

It’s worth noting, however, that the majority of its income stems from mortgages. With house prices and mortgage approvals starting to decline, it remains a possibility that Lloyds’ revenue could be impacted. Nonetheless, analysts think that the increase in rates should offset any declines for the time being. In fact, Lloyds stock is rated a buy as its dividend is also expected to increase. It has an average price target of 64.33p, or a 40% upside.

SSE

Energy prices have been the main culprit behind sky-high inflation. That’s because energy prices are at their highest levels since 2009. As such, I think SSE (LSE: SSE) is a share to buy for my portfolio given the circumstances.

When wholesale energy prices go up, energy suppliers increases their rates to cover the extra costs. This has allowed companies like SSE to benefit, with its top and bottom lines seeing modest increases. As a matter of fact, its profit and loss account saw its best numbers in FY22, which is why its shares are up 9% this year.

The latest inflation report shows that energy prices rose 3% on a month-on-month basis. And with a higher price cap expected in October, SSE should benefit from this. After all, its latest trading update indicates that it expects adjusted earnings per share (EPS) of at least £1.20 for FY23. This would bring its EPS to its highest level in five years.

Additionally, its dividend yield of 4.7% is rather modest and is expected to rise given its most recent increase in payout, from 25.5p to 60.2p. SSE shares are rated a moderate buy with an average price target of £20.78.

Unilever

Next on my list is Unilever (LSE: ULVR). Its share price has been rather volatile this year. Nevertheless, it has recovered by 5% since its reported its H1 numbers. Its shares are now only down by 1% on a year-to-date basis.

The fast-moving consumer goods conglomerate produces beauty products and personal care, foods and cleaning agents. Its brands include Lynx, Ben & Jerry’s, Dove, and many more. These are household names and have tremendous pricing power, given the inelastic demand surrounding most of its products. This is strongly reflected in the revised outlook given by CEO Alan Jope, when he improved the firm’s guidance.

Our guidance for underlying sales growth in 2022 was previously at the top end of a range of 4.5% to 6.5%. We now expect underlying sales growth to be above that range, driven by price with some further pressure on volume.

Unilever CEO Alan Jope

Nevertheless, it should be noted that Unilever shares are more of a defensive play to protect from potential downside at the moment. Analysts are forecasting an average price target of £40.81, which only means a potential 3% gain if I were to buy shares now.

Burberry

Burberry (LSE: BRBY) shares are a good inflation hedge, in my opinion. The brand’s status as a luxury retailer allows it to pass on many of its costs to consumers given the nature of its target market. This was confirmed by CFO Julie Brown in its Q1 trading update, with a positive outlook for the company.

The FTSE 100 retailer has benefited from the return of global travel, with a substantial amount of its sales coming from tourists. It saw its like-for-like sales numbers grow by 1% on an annual basis, despite lockdowns in key revenue driver, China. Excluding China, sales figures were actually rather impressive. They were 16% higher in Q1 overall, with EMEIA boasting impressive 47% growth. Moreover, the company’s most profitable products (leather goods and outerwear) also saw double-digit growth.

That being said, I should point out that China remains the firm’s achilles heel for the moment. With its government sticking to its zero-Covid policy, I don’t expect sales figures from that region to see an uptick any time soon. This is why its average price target currently sits at £19.34. Therefore, this is more of a long-term investment with a higher upside once China’s retail sales fully recovers.

Tesco

Last on my shopping list are Tesco shares (LSE: TSCO). Given that its core products are consumer staples, I’m expecting Tesco shares to be robust in a recessionary environment. It’s also been steadily increasing its dividend payouts, which should serve as an added benefit.

As the market leader in the UK supermarket sector with more than a quarter of the market share, I think Tesco will be able to outperform its peers. Its Aldi price match across hundreds of items has been a success so far. According to the last several Kantar grocery reports, the supermarket leader has seen its market share remain relatively robust. It has also managed to outperform most if its competitors with higher sales figures. And its Q1 trading update showed its strength in the industry.

Having said that, sales figures are expected to come in slightly lower for the year. The grocer no longer enjoys the tailwinds of the pandemic and faces slower sales as a result of high inflation. Even so, I still think Tesco can utilise its strong supply chain and relationship with customers to match last year’s stellar performance. Analysts seem to share the same sentiment, rating Tesco shares a strong buy with an average price rating of £3.19.

The post Inflation hits 10.1%! 5 shares to buy now! appeared first on The Twelfth Magpie.

More reading

• Is there any value left in Lloyds shares now they’re over £1?
• 3,566 shares in this FTSE 100 stalwart earns a £1,443 second income
• Prediction: this UK growth stock will outperform Lloyds shares over the next 5 years
• Barclays, NatWest or Lloyds shares: which is the better pick for a UK retirement portfolio?
• Here’s what a surging Tesco share price has done to £10,000 invested 5 years ago

John Choong has positions in Burberry. The Motley Fool UK has recommended Burberry, Lloyds Banking Group, Tesco, and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Earnings results are a great way for investors to judge a company. They’re used to determine whether companies are on track with their initial guidance. These results can often radically move share prices in either direction, depending on the numbers reported. So, here’s an earnings preview for three FTSE firms reporting results this week.

It’s always best to compare firms’ new quarterly/half-year numbers to those from prior years. But certain revenue figures may have been impacted by the pandemic, so it’s important to get context from pre-pandemic levels too. It can also be useful to consider whether a company can perform better than its previous year’s numbers, or if it can beat analysts’ annual forecasts. Analysts in the UK don’t always publish earnings previews for quarterly or half-year periods, but given their popularity, the shares covered below are exceptions.

Lloyds (H1 Earnings)

Lloyds (LSE: LLOY) is one of Britain’s biggest financial institutions. Its brands include Lloyds itself, Halifax, and Bank of Scotland. It earns the bulk of its revenue from mortgage loans. The FTSE 100 bank is expected to post its half-year earnings for its six months performance ending June on 27 July. The company’s financial year ends in December.

The overall consensus is that Lloyds is expected to continue growing its top line from rising interest rates. That being said, its diluted EPS is expected to decrease for the half year and full year. This is most probably due to the increasing number of defaults and bad loan provisions. Investors will also be keeping an eye out for the remediation figure, number of late-stage loans, and free cash flow to determine whether the UK is entering a recession.

Shell (Q2 Trading Update)

Shell (LSE: SHEL) is a British multinational oil and gas company. It is one of the biggest oil and gas firms. And by revenue and profits, it’s one of the largest companies in the world. The giant is set to reveal its Q2 numbers for its three months performance ending June on 28 July. The company’s financial year ends in December.

The earnings preview seems to indicate a top and bottom line improvement to Shell’s business, as last year’s figures were still impacted by worldwide lockdowns. As global travel resumes, investors will be keeping an eye out for future guidance to determine whether analysts estimates can be met for the full year. If so, the Shell share price is expected to stay green for the foreseeable future.

Unilever (H1 Earnings)

Unilever (LSE: ULVR) is a consumer goods conglomerate producing food, condiments, ice cream, cleaning agents, beauty products, and personal care. Its brands include Lynx, Ben & Jerry’s, Dove, and many more. Unilever will be releasing its half-year earnings for its six months performance ending June on 26 July. The company’s financial year ends in December.

While revenue is expected to increase on a half-year and full-year basis, underlying EPS is expected to fall. This is most probably due to high inflation rates that are beginning to take a toll on a global scale, with higher costs impacting the producer’s operation expenditure. Nonetheless, a beat on both revenue and EPS estimates this week could see the Unilever share price push into the green for the year.

The post Earnings preview: Lloyds, Shell, Unilever appeared first on The Twelfth Magpie.

More reading

• Is there any value left in Lloyds shares now they’re over £1?
• 3,566 shares in this FTSE 100 stalwart earns a £1,443 second income
• Prediction: this UK growth stock will outperform Lloyds shares over the next 5 years
• Barclays, NatWest or Lloyds shares: which is the better pick for a UK retirement portfolio?
• Here’s how much I think Lloyds shares will be worth by the end of 2027

John Choong has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Warren Buffet is renowned as one of the greatest investors of all time. Since he took the helm at Berkshire Hathaway in 1965, his investments have generated an average annual return of 20% – double that of the S&P 500.

While not all the Oracle of Omaha’s stock picks have delivered blockbuster returns, there’s certainly plenty of valuable advice he has offered along the way. Here are two pieces I’m using when buying stocks today.

Seize opportunities

It’s no secret that global markets have taken a beating this year. Inflation has spiked globally. And with it reaching near 10% in the UK and US, investor confidence has been knocked.

However, I don’t think Buffett would be concerned about this. As he once said: “Be greedy when others are fearful.” And, as such, I think the large fall we’ve seen in some good companies presents an opportunity to get in cheap.

Long-term vision

As with all stocks I invest in, I like to think long term.

As the man says himself: “If you don’t feel comfortable owning a stock for 10 years, you shouldn’t own it for 10 minutes.”

It’s more than likely that investments may hit a bump in the road at some point. But a long-term outlook nullifies any near-term headwinds.

With market volatility running rife at the moment, this is a great reminder that picking stocks for fundamental long-term growth is key.

What I’d buy

So, what stocks are out there for me right now that fit these criteria?

Well, I like the look of Unilever.

The stock is down nearly 10% over the past 12 months, showing investor confidence may have taken a hit as wider pressures continue to mount. And as a long-term investor, I think it would be a solid addition to my portfolio.

I like Unilever because of its strong brand name. The business owns over 400 household brands, including companies such as Sure and Dove. And with a third of the world using its products daily, this shows its strength.

I think because of this, it may fare well against rising inflation. Although rising rates will see consumers cut back on spending, it’s unlikely to be on the everyday essential items Unilever brands sell. Its strong market position also gives it, to some degree, more pricing power — which the firm proved in Q1.

The business is also building strong foundations for the long run as it commences a €3bn buyback scheme. It bought €750m worth of its shares back in March. And this should see the stock’s price rise in times ahead. Its 3.67% dividend yield is a further bonus.

One concern I have with Unilever is its large debt. And with interest rates potentially being hiked further, this only magnifies this issue for the firm.

However, I’d still follow Buffett’s advice when buying the stock. At a cheap price, I see Unilever as a strong long-term hold.

The post How I’m following Warren Buffett when buying stocks! appeared first on The Twelfth Magpie.

More reading

• 3,566 shares in this FTSE 100 stalwart earns a £1,443 second income
• 2 FTSE shares for beginners starting an ISA
• Is this former stock market hero now the ultimate FTSE 100 buy and hold?

Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

2022 has proved to be a volatile time for the UK stock market. With a Covid-19 hangover in full swing, and macroeconomic pressures such as inflation, year-to-date the FTSE 100 has fallen by nearly 4%.

With this drop, I’m on the lookout for FTSE 100 shares I can add to my portfolio in July and hold for years to come. Here are two I’d buy today.

Unilever

My first pick would be FTSE 100 powerhouse Unilever (LSE: ULVR). The company owns over 400 household brands, including names such as Ben & Jerry’s, Persil, and Sure. In 2022, the stock is down 5%.

What I most like about Unilever is its strong brand recognition. With a third of the world using its products daily, this gives the firm, to an extent, more pricing power. While the cost of living is increasing, it’s less likely that consumers will cut back on the essential items that the business sells. Chief executive Alan Jope warned earlier in the year of inflationary concerns. However, with a portfolio of well-known brands, I think the firm could fare well against the threat of surging rates.

In its latest results, Unilever also highlighted the start of a €3bn two-year buyback scheme. It began the first €750m instalment of this back in March. And this should hopefully boost the FTSE 100 share’s price in times to come.

My biggest concern with Unilever is its debt, which currently sits at over €25bn. With interest rates rising, this may also make the debt more difficult to eradicate. This could hold the firm back in the future.

However, I still have faith in Unilever. Its strong brand presence and stable nature are key for me in these volatile times. As such, I’d happily add the stock to my portfolio today.

GlaxoSmithKline

My second FTSE 100 buy would be pharmaceutical giant GlaxoSmithKline (LSE: GSK). It’s a healthcare business that offers medicines and vaccines globally.

GSK is similar to Unilever in the steadiness it can offer during stock market woes. And the fact that its share price is up 12% in the first half of 2022 is evidence of this. Healthcare and medicines are a requirement regardless of the economy. This has only been highlighted by the pandemic.

The company also posted some strong results in its latest update. The first quarter saw its sales increase by 32% to £9.8bn. Within this, its biopharma division saw a 40% rise in sales, while its consumer healthcare unit saw a 14% growth.

These impressive results posted by Glaxo may be threatened in the months ahead by headwinds such as supply chain issues and rising costs.

Yet despite this, I would buy GSK today. With economic conditions set to potentially worsen, the pharmaceuticals firm is a useful addition to my portfolio. Its 4.2% dividend yield may also offer me some form of protection against rising inflation in the months ahead.

The post 2 FTSE 100 shares I’d buy in July appeared first on The Twelfth Magpie.

More reading

• 3,566 shares in this FTSE 100 stalwart earns a £1,443 second income
• 2 FTSE shares for beginners starting an ISA
• Is this former stock market hero now the ultimate FTSE 100 buy and hold?

Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

So, with the Unilever share price down in 2022, is this an opportunity for me to add the stock to my portfolio? Let’s take a look.

Why is the share price down?

Let’s begin by taking a look at why the Unilever share price is falling. To start, the firm has been largely impacted by rising inflation. It has seen its costs rise and coupled with the firm failing to grow its sales volumes, it’s clear to see why the stock has struggled.

Chief executive Alan Jope recently mentioned how inflation will be one of the biggest challenges the business faces this year. And, as such, the firm expects between 140 to 240 basis points to be hacked off its underlying operating margin. This will most certainly have an adverse impact on the price of Unilever shares.

It has also come under large pressure from investors of late. This includes issues surrounding new targets for selling more healthy foods. And further pressure was applied after its recent failed bid for GlaxoSmithKline’s consumer healthcare division. With its bid in the region of £50bn, shareholders deemed the move unsustainable given the firm’s financial position. With many holding a preference for focusing on sales and profit growth, the Unilever share price dropped 11% as a result.

Wider outlook

However, there are wider issues I must consider when looking at Unilever.

One positive is that its risk is diversified. The business has global sales and a solid distribution network. It also owns strong brands and has established relationships with retailers. From this point of view, Unilever shares seem a solid buy.

As well as this, RBC recently increased its price target for the firm from 3,400p to 3,600p. In part due to its solid recovery post-Covid, it was also because of the recent stake built up by Nelson Peltz’s activist hedge fund Trian Partners. With a history of streamlining consumer goods groups, this could provide Unilever with a boost in the future.

Should I buy?

So, where do I stand regarding Unilever? I think in the near term the firm will face a variety of issues. For example, inflation will hurt the business. And should it continue to rise, I think the Unilever share price could drop even further. Pressure from shareholders is also an issue. Should their trust in management continue to weaken, we may begin to see more investors offload shares.

However, these are short-term issues. Unilever has a strong fundamental business structure. And the presence of Trian should help guide the firm in the right direction. Because of this, I would be willing to add a speculative amount of Unilever shares to my portfolio.

The post Should I be buying Unilever shares at the current price? appeared first on The Twelfth Magpie.

More reading

• 3,566 shares in this FTSE 100 stalwart earns a £1,443 second income
• 2 FTSE shares for beginners starting an ISA
• Is this former stock market hero now the ultimate FTSE 100 buy and hold?

Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.