I’m considering whether the share prices of Unilever plc (LON:ULVR) (ULVR.L), Diageo plc (LON:DGE) (DGE.L), Glencore PLC (LON:GLEN) (GLEN.L), Anglo American plc (LON:AAL) (AAL.L) and Reckitt Benckiser Group Plc (LON:RB) (RB.L) can beat the FTSE 100 in future.
In my opinion, Unilever could outperform the index. Its recent update showed it is making good progress with its strategy, while its margin improvements could boost its overall performance. Although there was a negative forex impact, its underlying performance remains strong to my mind. With a diverse product range and exposure to fast-growing emerging markets, I’m upbeat about the prospects for Unilever.
It’s a similar story with Diageo. The company has a high degree of customer loyalty which could allow it to deliver high EPS growth over the long run. Its focus on margin expansion may take some pressure off sales growth and may allow it to increase dividends per share. This could stimulate investor sentiment and make Diageo a stronger income stock in my view.
Glencore is a much-improved business in my opinion. The company has reduced debt considerably in the last few years and this has put it on a more sustainable footing for the long run. It has become more efficient and leaner, which could provide it with greater profitability in future. Trading on 13x earnings, I think Glencore offers good value for money.
Likewise, Anglo American has slimmed down its asset base through a programme of disposals. The company has been able to improve its efficiency and deliver stronger financial figures. In fact, it has now reinstated dividends, which I feel shows how confident it is in its future outlook. With a diverse asset base and growth potential, I think Anglo American could beat the FTSE 100.
Reckitt Benckiser has disappointed me slightly this year, with its share price being flat while the FTSE 100 has risen. However, a reorganisation of the company could lead to stronger growth. The acquisition of Mead Johnson may also improve the company’s outlook. Reckitt Benckiser has a strong position within key markets and, in the long run, I think it could be a sound performer which beats many of its industry rivals.