Having recovered from the recent market volatility, Polo Ralph Lauren (NYSE:
RL) and Unilever (NYSE:
UL) reached new 52-week highs of $141.71 and $33.74 per share, respectively, in yesterday's trading session.
Polo Ralph Lauren easily beat EPS estimates for the most recent quarter, bought back shares and offered a strong outlook for revenue for the current quarter, as well as an operating margin outlook below the consensus. The New York-based company designs and markets apparel and accessories, as well as housewares, that can be found in department stores and online. This S&P 500 member has a market cap of $12.6 billion.
The long-term earnings per share growth forecast is 13.4% and the return on equity is 20.5%. Its dividend yield is 0.6%. The P/E ratio and the PEG ratio are higher than the industry average, though. Shares are trading more than 24% higher than at the beginning of the year. The stock has outperformed competitor Liz Claiborne (NYSE:
LIZ), as well as the broader markets, year to date.
Unilever's CEO recently stated that emerging markets will make up three-quarters of its sales within a decade. Both profits and sales rose in the second quarter despite pressure on margins from rising materials costs. Unilever PLC is a subsidiary of London-based Unilever Group. Among its many offerings are Ragu, Wish-Bone, Popsicle, Lipton, Slim Fast, Dove and Vaseline. The consumer goods giant has a market cap of $96.0 billion.
Unilever has a long-term EPS growth forecast of 10.8%. Its dividend yield is 3.6% and its return on equity is 32.1%. It also has P/E and PEG ratios higher than the industry average. Shares are trading more than 12% higher year to date. Over that time, the stock has outperformed competitor Procter & Gamble (NYSE:
PG) and the broader markets.
Action Items: Bullish: Traders interested in consumer goods exchange traded funds might want to consider the following trades:
- Consumer Discretionary Select Sector SPDR Fund (NYSE: XLY): up more than 18% in the past year
- First Trust Consumer Staples AlphaDEX Fund (NYSE: FXG): up more than 24% in the past year
- iShares S&P Global Consumer Staples Index Fund (NYSE: KXI): up almost 16% in the past year
Or traders might want to consider these alternative positions:
- ProShares UltraShort Consumer Goods (NYSE: SZK): up more than 8% in the past month
- ProShares UltraShort MSCI Emerging Markets (NYSE: EEV): up about 14% in the past month
FXGFirst Trust Cons. Staples AlphaDEX
$61.84-0.71%
KXIiShares Global Consumer Staples ETF
$65.16-1.56%
PGProcter & Gamble Co
$146.280.74%
RLRalph Lauren Corp
$368.49-0.22%
SZKProShares UltraShort Consumer Staples
$12.520.89%
ULUnilever PLC
$64.33-1.09%
XLYState Street Consumer Discretionary Select Sector SPDR ETF
$121.980.04%
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