Friday newspaper share tips: Mixed views on Unilever; WH Smith a good long term bet

Unilever’s results on Thursday left the newspaper pundits in disagreement about whether now was time to invest in the consumer goods company.

In the Telegraph Questor said that investors would have breathed a sigh of relief after it posted a third quarter jump in revenue and a lift in the outlook for the full year. With good sales growth in Latin America and a number of other emerging markets, it noted that emerging market growth is the key to Unilever’s share price.

Questor pointed out that the shares are highly rated and trading on 21 times forecast earnings, reflecting the company’s defensive qualities and growth track record

For all those reasons and the company being known to pay regular dividends, Questor said it was worth buying for the long term.

However Tempus in the Times didn’t completely agree, noting that the results had some one-off factors on its side, including the non-repetition of some destocking in China and higher sales in Latin America before possible price rises.

Tempus said the company was trying to become a more upmarket brand, especially after purchasing four high-range personal care businesses, but growing the business will be slow.

“On 22 times earnings, and with a dividend yield of about 3 per cent, there does not seem a lot to go for in the price.”

For those reasons, it advised to avoid the shares for now.

Tempus also commented on WH Smith, highlighting that it was odd for a retailer to celebrate flat sales as the best result in years. The company’s strategy isn’t in selling items that can be found elsewhere for less, nor is it expanding the city retail network.

It pointed out the retailer has been using its high cashflow to invest in outlets at sites like railway stations, airports and the like, with any extra being given back to investors.

The pundit said that “you get what you see with WH Smith”. Because of its clear strategy, Tempus suggested the shares are good to buy long term.