Please ensure Javascript is enabled for purposes of website accessibility

Why Unilever, AstraZeneca, and Kier Group Should Lag the FTSE 100 Today

By Alan Oscroft - Apr 25, 2013 at 12:22PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Unilever, AstraZeneca, and Kier Group are all falling.

LONDON: The FTSE 100 (FTSEINDICES: ^FTSE) dipped early this morning, despite the news that the U.K. economy has so far avoided a triple-dip recession by growing 0.3% in the first quarter of the year. But sentiment seems to have settled after the index was shaken by a couple of disappointing results, and the FTSE is now 11 points up on the day, to 6,442.

So which big companies have held the FTSE back today? We take a look:

Unilever
Unilever (ULVR -4.81%) shares fell 55p (1.9%), to 2,790p, after a first-quarter update told us of lower-than-anticipated sales in Europe. Double-digit growth in emerging markets did, however, help drive underlying sales up 4.9%. And the firm was happy enough with these figures to lift its quarterly dividend by 10.7% to 26.9 euro cents per share.

Unilever shares have had a very good 12 months, rising by around 35%. But that does put them on a forward P/E of 20 now, which some will see as perhaps a bit overpriced for a household consumables company.

AstraZeneca
Pharmaceuticals giant AstraZeneca (AZN 0.06%) also saw its shares slip today, down 90p (2.6%) to 3,300p. After loss of exclusivity for several drugs, including Seroquel IR and Crestor, in various markets, revenue for the first quarter fell by 12%, leading to a 31% drop in pre-tax profit at constant exchange rates.

That was largely anticipated, but it does surely put more pressure on the firm's recently announced plans for rejuvenating the business and getting profits back on track. With a couple of years of earnings falls expected, AstraZeneca shares are currently on a forward P/E of under 10.

Kier Group
Kier Group (KIE -0.26%) shares dipped 9p (1%) to 1,190p after a clarification to yesterday's interim management statement stressed that previous comments regarding management expectations were not meant to be profit forecasts. The update itself was pretty positive, telling us that the construction group is on course to meet its expectations for the year.

But the real impact on the share price was from yesterday's news of the firm's recommended offer for the acquisition of May Gurney Integrated Services (LSE: MAYG). The deal, which will be settled partly in shares and partly in cash, values the takeover target at £221m, or 315p per share -- and that, unsurprisingly, gave May Gurney shares a boost, up 16% to today's 297p.

Finally, reliable dividends can more than compensate for the day-to-day ups and downs of share prices. So how about a company that's offering a 5.7% yield, and which could be set for some nice share price appreciation too?

It's the subject of our BRAND-NEW report, "The Motley Fool's Top Income Share For 2013," which you can get completely free of charge -- but it will only be available for a limited period, so click here to get your copy today.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

AstraZeneca PLC Stock Quote
AstraZeneca PLC
AZN
$10,250.00 (0.06%) $6.00
Unilever PLC Stock Quote
Unilever PLC
ULVR
$3,451.50 (-4.81%) $-174.50
Kier Group plc Stock Quote
Kier Group plc
KIE
$75.80 (-0.26%) $0.20

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
328%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.