Trying to build a portfolio from scratch can be an incredibly daunting process. There are thousands of shares out there to choose from and picking 10 or 20 of the best equities requires a lot of work and research.
However, there are some shares out there that are suitable for almost any investor’s portfolio. These companies have market-leading positions, highly recognisable brands and have proven over the years that they’re working for shareholders.
Unilever (LSE: ULVR) is one such company. Unilever has been around for decades and currently owns over 400 brands, 13 of which achieve annual sales of more than €1bn. Over 2bn people every single day use Unilever products. Few companies have been able to achieve the same success, which is why Unilever is perfect for almost any portfolio.
Indeed, the company isn’t going into reverse any time soon and is well positioned to continue to grow and achieve results for shareholders through all stages of the economic cycle. The company’s first-quarter results at the end of last week showed underlying sales growth of 4.7% year-on-year with emerging market sales up 8.3%. Underlying volume growth hit 2.6%. This was despite the current uncertainty facing the global economy.
Shares in Unilever currently trade at a forward P/E of 22.3 and support a dividend yield of 3.4%. City analysts believe the company’s earnings per share are set to grow to around 7% per annum for the next few years.
UK’s largest pensions provider
Aviva (LSE: AV) has built itself up to become the UK’s largest retirement savings and pensions provider. In many ways, this means the business is even more defensive than Unilever, as Aviva is looking after pensions that can have a lifespan of more than 70 years.
What’s more, unlike Unilever, Aviva doesn’t have to keep up with the latest consumer tastes and trends. And the UK’s ageing population should continue to provide a steady stream of clients for Aviva while changes to the UK’s pension regime will also increase demand for the company’s services.
It trades at a forward P/E of 8.7 and the group’s shares support a dividend yield of 4.7%.
A margin of safety
Vodafone’s (LSE: VOD) most attractive quality is the company’s margin of safety. Vodafone has a huge economic advantage in its European, South African and Indian telecoms network. It would cost tens or possibly even hundreds of billions of pounds to replicate the company’s existing infrastructure. Additionally, it’s a strong brand that’s internationally recognised. These traits are exactly the sort of qualities that Warren Buffett looks for in potential investments.
Also, Vodafone has shown over the years that it’s highly driven to return cash to shareholders. The company currently returns the majority of its profits to investors via dividends and in the past has issued special dividends as well as conducting share buybacks.
Vodafone’s shares currently support a dividend yield of 4.8% and trade at a forward P/E of 48.4. City analysts expect the company’s earnings per share to grow 21% next year and 29% the year after.