In light of producer price indexes increasing more than expected in September, five consumer packaged goods companies that have high financial strength and profitability include Unilever PLC (UL, Financial), The Estee Lauder Companies Inc. (EL, Financial), Tyson Foods Inc. (TSN, Financial), Church & Dwight Co. Inc. (CHD, Financial) and Usana Health Sciences Inc. (USNA, Financial) according to the All-in-One Screener, a Premium feature of GuruFocus.
On Wednesday, the Bureau of Labor Statistics reported wholesale prices increased by 0.4% during September, higher than the Dow Jones estimated gain of 0.2%. Despite this, wholesale prices increased 8.5% from the prior-year month, but were down from August 2022's year-over-year growth of 8.7%.
The Federal Reserve announced in its September meeting that it expects higher interest rates to remain in place “until prices come down.”
As investors continue grappling with high inflation rates, GuruFocus’ All-in-One Screener listed several consumer packaged goods companies that have a financial strength rank of at least 6 out of 10, a profitability rank of at least 7 out of 10 and a predictability rank of at least 3.5 stars out of five.
Unilever
Shares of Unilever (UL, Financial) traded around $43.50, showing the stock is modestly undervalued based on its price-to-GF Value ratio of 0.75 as of Wednesday.
The U.K.-based personal product company has a GF Score of 89 out of 100 based on a profitability rank of 9 out of 10, a growth rank of 8 out of 10, a momentum rank of 5 out of 10 and a rank of 7 out of 10 for financial strength and GF Score.
Unilever has a profitability rank of 9 out of 10, driven by several positive investing signs, which include a 4.5-star business predictability rank and an operating margin that has increased approximately 4.2% per year and is outperforming around 88.32% of global competitors.
Unilever’s financial strength ranks 7 out of 10 on the back of a high Altman Z-score of 3.12 and an interest coverage ratio that outperforms more than 56% of global competitors.
Gurus with holdings in Unilever include Hotchkis & Wiley and Ken Fisher (Trades, Portfolio)’s Fisher Investments.
Estee Lauder
Shares of Estee Lauder (EL, Financial) traded around $215.39, showing the stock is modestly undervalued based on its price-to-GF Value ratio of 0.78 as of Wednesday.
The New York-based beauty care products company has a GF Score of 93 out of 100 based on a rank of 9 out of 10 for profitability and growth, a momentum rank of 8 out of 10, a GF Value rank of 7 out of 10 and a financial strength rank of 6 out of 10.
Estee Lauder has a profitability rank of 9 out of 10, driven by several positive investing signs, which include a 3.5-star predictability rank and an operating margin that has increased approximately 3.3% per year and outperforms more than 90% of global competitors.
The company’s financial strength ranks 6 out of 10: Although it has a high Altman Z-score of 5.65, Estee Lauder’s debt-to-equity ratio of 1.37 underperforms 86.12% of global competitors.
Tyson Foods
Shares of Tyson Foods (TSN, Financial) traded around $64.16, showing the stock is modestly undervalued based on its price-to-GF Value ratio of 0.70 as of Wednesday.
The Springdale, Arkansas-based meat processing company has as GF Score of 94 out of 100 based on a rank of 9 out of 10 for profitability, growth and GF Value and a rank of 7 out of 10 for financial strength and momentum.
Tyson Foods’ profitability ranks 9 out of 10 based on several positive investing signs, which include a four-star business predictability rank, a high Piotroski F-score of 8 out of 9 and an operating margin that his increased approximately 1.7% per year on average over the past five years and outperforms more than 74% of global competitors.
Church & Dwight
Shares of Church & Dwight (CHD, Financial) traded around $71.88, showing the stock is modestly undervalued based on its price-to-GF Value ratio of 0.75 as of Wednesday.
The Ewing, New Jersey-based baking soda and laundry products manufacturer has a GF Score of 95 out of 100 based on a rank of 10 out of 10 for profitability and growth, a GF Value rank of 9 out of 10, a financial strength rank of 6 out of 10 and a momentum rank of 5 out of 10.
Church & Dwight’s profitability ranks 10 out of 10, driven by several positive investing signs, which include a five-star business predictability rank and an operating margin that has increased by approximately 0.8% per year on average over the past five years and is outperforming around 90% of global competitors.
Usana Health Sciences
Shares of Usana Health Sciences (USNA, Financial) traded around $58.02, showing the stock is significantly undervalued based on its price-to-GF Value ratio of 0.65 as of Wednesday.
The Salt Lake City-based nutrition and personal care products company has a GF Score of 92 out of 100, driven by a rank of 10 out of 10 for GF Value and financial strength and a rank of 9 out of 10 for profitability and growth despite momentum ranking just 4 out of 10.
Usana Health Sciences’ financial strength ranks 10 out of 10, driven by several positive investing signs, which include a high Altman Z-score of 8.4 and an interest coverage ratio that outperforms more than 92% of global competitors.
