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TheStreet Open House

Colgate-Palmolive and Unilever Upending Procter & Gamble

Stocks in this article: ULCLPGPF

Comparing "apples to apples" with these three companies is challenging. Investors want to see earnings per share (EPS), revenue growth, and healthy margins. So let's see a one-year chart of each, starting with PG.

PG Chart PG data by YCharts

Well, PG is experiencing a tough time in the diluted, quarterly and year-over-year EPS growth department. Its trailing 12-month (TTM) revenue per share is looking up though. Now let's peak at the CL chart.

CL Chart CL data by YCharts

After dipping like a concrete donut at the beginning of 2013, CL's diluted quarterly, year-over-year EPS is heading in the right direction. So is its TTM revenue per share. Of the two charts and the two companies stocks I favor CL's and so does the market for the time being.

PG is working hard to expand into growing emerging markets such as Latin America, India and Russia. But it's faced tough competition from already entrenched smaller rivals including Unilever and Colgate-Palmolive. Below is the one-year chart for UN. Revenue (TTM) has fallen.

UN Chart UN data by YCharts

So if I were to put my money to work at the moment in the consumer goods sector I'm beginning to lean towards UN. With the price per share below $39 it offers a dividend yield-to-price of 3.64% and a current PE ratio of around 18. When it comes to revenue the company has a potent plan in place.

Unilever has publicly stated this summer, "Our ambition is to double the size of our business, whilst reducing our overall environmental footprint (including sourcing, consumer use and disposal) and increasing our positive social impact." That fits well with my environmentally sensitive conscience.

Unilever announced on Aug. 12 that it signed an agreement for the sale of its Wish-Bone and Western dressings brands to Pinnacle Foods (PF) for a total cash consideration of about $580 million, subject to regulatory approval.

Kees Kruythoff, president of Unilever North America, said: "Wish-Bone is an iconic brand and the number-one Italian dressings brand in the U.S. We believe that the potential of both the Wish-Bone and Western brands can now be more fully realized with Pinnacle Foods."

My conclusion is that obviously these three superstars of the consumer goods sector are in "mark-down mode" and it's possible all three may test the June 24 lows when PG touched $75.63. That same day CL bottomed at $55.47 and UN cratered at $37.55. Personally, those would be my buy targets.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Marc Courtenay is the founder and owner of Advanced Investor Technologies, LLC, as well as the publisher and editor of www.ChecktheMarkets.com.

Courtenay holds a Master's of Science degree in Psychology from California Polytechnic State University, and is a former senior vice-president of Investments for two major brokerage firms. He's been a fiercely independent investment "investigator" and a consulting contributor to the investment publishing world for over 30 years. In addition to his role as an investment publisher and analyst, he serves as a marketing consultant to the investment media industries.

In his role as a financial editor, he specializes in unique investment strategies, overlooked stock investments, energy and resource companies, precious metals, emerging growth companies, the prudent use of option strategies,real estate related opportunities,wealth preservation, money-saving offers, risk management, tax issues, as well as "the psychology of investing". Because of his training and background in Clinical Counseling and Psychology, he enjoys writing about investor behavior, the ┬┐herd mentality, how to turn investment mistakes into investment breakthroughs and the stock market's behavioral trends and patterns.


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