With Brexit in the news lately, I’m considering the prospects for global stocks Unilever plc (LON:ULVR) (ULVR.L), Imperial Brands PLC (LON:IMB) (IMB.L), Diageo plc (LON:DGE) (DGE.L), Burberry Group plc (LON:BRBY) (BRBY.L) and Reckitt Benckiser Group Plc (LON:RB) (RB.L).
Although Unilever has exposure to the UK, it is very much a global company. In fact, the majority of its sales are from the developing world. I think this could offer the company a clear catalyst in future, since wealth levels across the emerging world are due to rise. With a strong and stable balance sheet and impressive product offering in my eyes, Unilever is one of my top picks ahead of Brexit.
Also operating in the UK and abroad is Imperial Brands. It has exposure to a range of potential growth areas, while its reduced risk products could help it to post improving EPS in future. I think Imperial Brands is cheap at the moment, with its P/E of less than 13 being relatively low compared to other global tobacco stocks.
Burberry is on the up in my view. It has the potential to become more efficient as a new management team may be able to cut costs and create a more organised business which can deliver on the strength of its brand. Burberry has pricing power in its key markets in my opinion, while the diversification of its products could lead to higher growth in future.
Reckitt Benckiser has refocused its business in the last few years and I feel it has a strong position through which to deliver improved earnings. The company has exposure to some of the best consumer growth markets in the world and has strengthened its position in China in my eyes via the acquisition of Mead Johnson. In spite of rising 94% in the last 5 years, I think Reckitt Benckiser has more growth potential.
Diageo is another stock I’m optimistic about ahead of Brexit. I feel the company’s diverse product range and brand strength could help push its EPS higher. It is also seeking to improve its margins and this gives me additional confidence in its share price growth potential over the medium term. With Diageo’s strong track record of growth, I think it has an appealing risk to reward ratio.