Reckitt Benckiser is up more than 12% year-to-date, while Unilever is up 11%. Thats particularly impressive, given that the FTSE 100 is back where it started.
So there are some things you can rely on in an uncertain world. Can it continue in 2015?
Reckits Stateside Slowdown
It hasnt been all plain sailing. RB has been hit by slowing markets in south-east Asia and Latin America, shrinking sales growth to the lower end of its 4% to 5% forecast.
US sales slowed, surprisingly, given that this is supposed to be a global bright spot.
But management is narrowingits efforts to thecore consumer health market, which now accounts for one-third of profits, with plans to spin off its underperforming pharmaceuticals division.
That should help give it focus and momentum.
Unilever Cracks The US
Unilever is ending the year on a high, up 8% in the last month, despite getting sucked into a damaging public row with a far smaller rival about eggless mayonnaise.
It too had a mixed Q3, with sales up just 2.1%, against an expected 3.7%. Emerging market weakness was largely to blame, as, inevitably, was moribund Europe.
At least it made headway in the US, with sales up 6.8% despite price cutting.
When I look at Unilevers food brands, however, I have a slitherof concern. Knorr, Hellmanns, Flora, these are brands I dont touch, and Im not the only consumer easing away from processed food. It looks low grade and old-fashioned.
Names such as Lux, Surf, Vaseline and Comfort give it plenty of security, but this is a challenge the company hasnt faced up to yet. I think it should.
Reckitt Benckiser is less of a concern as its brands largely focus on health (Neurofen, Strepsils and Clearasil) and household cleaning (Dettol, Harpic, Finish), rather than food.
My other major worry is that these stocks are both expensive. Thats the price you pay for popularity, and both companies consistently trade around 20 times earnings, as they do today.
Reckitt Benckisers yield disappoints at just 2.6%, and low forecast earnings per share growth (EPS) ofjust 2% in 2015 looks underwhelming. Unilever yields a more rewarding 4%, with forecast EPS growth for 7%.
Both companies shouldcontinue to offer security in an uncertain world, although I wouldnt expect investors to clean up with either stock.
More of the same seems likely, but Reckitt Benckiser and Unilever offering with five-year returns of 66% and 50% respectively, against 25% on the FTSE 100 over the same period, few will complain about that.
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Harvey Jones has no position in any shares mentioned. The Motley Fool UK owns shares of Unilever. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.