Analysis of Unilever 2015

Company: Unilever

ISIN NL0000009355 | WKN A0JMZB

Business: A Dutch-British consumer product company. They have several well known brands such as Dove, Axe, Lipton, Ben & Jerry's, Knorr, Vaseline, Cif, Bertolli etc. For the more complete list of brands please look here however they have in total over 400 brands so they only show the most successful ones. My question is if they should not remove some just like P&G decided to do...

Active: World wide presence with product sales in 190 countries.

P/E: 23.9

Here you can find the previous analysis of Unilever. 

This analysis was requested by Rafy - Long Investor on Twitter. 

The P/E for Unilever is far too high for me with 23.9 and also the P/B is awful with 9.1 which gives a very clear no go from Graham. The earnings to sales look good with 11% and the ROE is excellent with 37.9%! The book to debt ratio is also very good with 1.0.
In the last five years they have had a yearly revenue growth of 1.8% which is bad and this gives us a motivated P/E of 9 to 12 which means that Unilever is overvalued by the market today.
They pay an ok dividend of 2.7% but this does however correspond to 65% of their earnings so they better start increasing their earnings to keep up those dividends! Their first quarter of 2015 was apparently, due to currency reasons, very good in terms of revenue.

Conclusion: Graham says no to Unilever and I also find them to be too expensive today! The P/E, P/B is too high and the dividend to earnings ratio I also do not care much for. Still the ROE is excellent and as I wrote in the last analysis I liked that they have started the Happiness Stations but I was not so happy with what I got when I went there and the time it took to prepare it so they need to optimize that!

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