Unilever (LSE: ULVR) has increased its dividend payout this quarter by 5% compared to a year ago and investors will receive 30 cents on 9 March.

Unilever is a great defensive play to add for the long term. The world might blow up, but people will always buy food, soap and shampoo. Its recent results really highlight this because, despite falling inflation pressurising consumer product prices, the multinational executed effective strategies to grow its business markets that were showing signs of weakness.  

Sales in emerging markets rose 7.1%, helping to take the sting out of a 6% decline in pre-tax profits. Meanwhile, the brand loyalty campaigns Unilever mounted in the UK proved effective as a fightback against falling food prices.

Will currency weakness begin to hurt?

Risks for Unilever include the continued deflationary trend globally and a weakening US dollar, because Unilever reports in euros but makes most of its sales in dollar areas. When the dollar is strong, this contributes significantly to the bottom line. But dollar strength is no longer a given, especially with the Fed indicating last week that it places greater emphasis on ‘global factors’ before raising interest rates again. This means that when the yuan weakens, it can even drag down the dollar. Crazy, but true.

Unilever’s 2.9% dividend yield might look feeble, but this also means the company is prudent in not over-promising and is making sure the cover is rock solid (1.9 times). With a P/E of 23 and the stock weathering the January sell-offs remarkably well by remaining flat, I believe this is still absolutely a great buy.

Weathering the storm

Imperial Tobacco Group (LSE: IMT) stock goes ex-dividend on Thursday 4 February and the company pays a dividend of £0.49 per share on Thursday 31 March.

Imperial will soon be faced with a brand loyalty challenge as the UK government plans to ban graphics on the outside of cigarette packets. However, it’s unlikely to impact the world’s fourth-largest cigarette company much. It’s going from strength to strength, mostly due to foreign sales. It realised a 15% rise to £1.76bn in pre-tax profits for the year to the end of September 2015.

Like Unilever, the US is a key market for Imperial. And as the British pound is less of a ‘safe haven’ currently than the euro, it looks like Imperial’s future earnings are somewhat less prone to currency risks than Unilever’s. A slump in emerging markets is also less of a threat to Imperial than Unilever as people will always smoke despite economic downturns.

There’s everything to like about Imperial. The company has committed to paying more regular dividend yields, and currently pays 3.74%. Its stock was impervious to January’s market turbulence too,  holding on to its 20% gains over the past 12 months. I would say, go buy it!

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Angelique van Engelen has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended 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.

The Chinese slowdown and record low oil prices have left their imprint all over the indices. In addition to this mess, smaller UK-focused companies could suffer from more pronounced volatility should a referendum be held as early as June, which news reports suggest is David Cameron’s preference.

Analysts at Credit Suisse are pointing at the three UK companies with the largest risk due to European exposure  — Berendsen Plc, Thomas Cook Group Plc and Shanks Group Plc. They generate more than 60% of their income on the Continent and all three happen to be in the FTSE 250.

Volatility indicators show too that the swings in UK markets have been more pronounced this year than movements in European markets.

Small IS better

Over the past few years there has been sense in fleeing into small and mid-caps when the Footsie let you down. The FTSE 100 comprises companies that generate 70% of their income outside the UK. Escaping its global risks by targeting companies with more UK-focused operations might no longer make such sense if you look at the performance of indices this month.

But is that really the case? Let’s look at what’s going on and how stocks are really affected.

The hype factor?

Firs, there might be more hype than fact to the idea that the indices are down due to Brexit fears. In my view, the FTSE 250 is at its lowest premium over the Footsie since May because investors have taken out money while it was still there in the wake of the global carnage caused by oil and a weakening China. Valuations, which had been driven up last year by investors eager to buy into UK companies dealing with the strong UK economy, have fallen 18% this year. Incidentally, the index hit a decade high at the end of 2015. The FTSE 250 average multiple is now 15.8 times projected earnings compared with 14.8 for the FTSE 100. And both indices are said to still be overvalued.

Second, the forecast earnings of smaller companies still outstretch those of the FTSE 100 generously, something investors never ignore for long. Last year’s returns on the AIM All-Share Index were robust. It was up 6.6% despite also being dragged down by energy stocks. And the FTSE Small Cap index, which was up 4% last year and has shed less than 1% so far this month, has an average growth prognosis of 25%.

Finally, Britons won’t stop consuming should the Brexit happen. They might consume differently. But that won’t immediately wipe out the earnings potential of sound UK businesses operating in a still-expanding economy.

There’s plenty of scope for small and selective mid-cap companies to continue performing well, despite Brexit fears. Brexit is a concept at the moment and not a reality, which is important to bear in mind as the EU recovery starts to pick up and potentially offer good opportunities, especially in cyclical stocks.

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Angelique van Engelen has no position in any shares mentioned. The Motley Fool UK has recommended Berendsen. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Could this be the tipping point?

Last year, the company badly underperformed both the FTSE 100 and the FTSE 250 with Ocado’s misfortunes to a large extent based on the threat of competition from Amazon’s newly-launched grocery delivery arm Pantry.

Fundamentally Ocado is a healthy company with a modest profit. It was voted best online supermarket by Which? and provides customers with an excellent experience thanks to impeccable delivery logistics.

Takeover is good news

Already, various analysts, including Credit Suisse and Goldman Sachs, hypothesise that Ocado would benefit from a takeover by Amazon that would give it strong backing and multinational status.

The two companies essentially offer the same service, even though Amazon’s Pantry doesn’t have a complete assortment of both dry and fresh grocery items in most UK areas, something that Ocado does boast.

Amazon’s short track record in delivering groceries isn’t perfect. Rob Joyce, a Goldman Sachs analyst, says that Amazon either ought to license Ocado’s website and delivery structure or have the company deliver Amazon’s goods, both of which make sense.

Despite the share spike (the company yesterday soared 11% at one point) to £2.57, the price is currently barely above the level it fell to late last year when Amazon’s CEO Chris North commented in the Guardian that Pantry would extend its range of grocery items. Ocado’s share price slid around 8% on that news.

Of course Ocado wasn’t the only sufferer from Amazon’s foray into groceries. J Sainsbury fell 1.2% on the news, Tesco 0.4%, and Ocado partner WM Morrison lost 1%.

Ocado’s Achilles heel

However, investors did punish Ocado much more severely. Selling volumes reached above-average numbers, which hammered the stock. The rationale was that Tesco and Sainsbury have physical stores as their bread and butter. But Ocado’s online reliance meant that it could easily fall victim to Amazon’s expansion, with the US giant having shown time and again it can eliminate rivals in many sectors.

Amazon outfoxed?

Obviously this realisation was going to be detrimental to the Ocado share until something better happened. With a P/E of 234, it’s difficult to justify an investment, certainly if the long-term prospect of a company is being undermined.

But we live in a rapidly changing world and you could argue that there have been enough instances in Amazon’s global history where it too was outfoxed. Looking at examples of this (Alibaba in China and Flipkart in India) you can see that Amazon suffered mostly when it encountered rivals with a strong foothold in a market. Ocado has that in the UK, where online grocery shopping penetration is 6%.

In the UK grocery sector, Amazon has yet to make an impression. Everybody knows that deliveries can really mess up online purchases and when it comes to feeding the family, who would want to rely on a less-than-perfect delivery system?

Certainly if a deal is on, I would put some money in Ocado. The difficulty is to know whether this is really on the cards or not.

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Angelique van Engelen has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Amazon.com. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

The homewares manufacturer, which creates fine China products from its Stoke-on-Trent factory, makes for an extremely good investment case.

First — its revenues. Portmeirion will report revenues exceeding £68.0 million.

Second — its business strategy. This is innovative and shrewd. The company did not suffer at all during the latest financial crisis. And its current revenue  level is being realised even after investing in new manufacturing facilities following Portmeirion’s takeover of British potteries in 2014.

Third — profits. If its full-year profits for 2015 will have risen in line with revenues, they are going to be to the tune of £3.99 million. Portmeirion reported a  profit of £1.8 million in the first half of 2015, and £27.9 million in revenues.  

Fourth — dividends. In line with this growth, the company is expected to raise dividends to 3% this year, analysts say. Portmeirion has never cut or withheld dividends since 1988 when it listed on the LSE in 1988, and dividends have grown 10% for the past three years.

All Portmeirion’s financial numbers over the past decade reveal that this is one very stable, dependable company with solid growth year after year. Its revenues have been at record highs for the past six years, with 2014 being its best year ever.

With good, well-covered dividends, capable management, and a share trading at a P/E of only 15.9 and no debt to speak of, what’s not to like?

AO World (LSE: AO) briefly hit the list of top risers on the LSE this morning, piggybacking on Home Retail Group’s (LSE: HOME) rally, but as frequently is the case with this stock, excitement was short-lived and unsubstantiated by volume. But I am glad it caught my attention, though, because even though I would sell this stock straight away today, I am keeping an eye on it for the long term. 

The problem with AO World is that soon after the company was floated at £4.12, it started to make a loss. Investors who bought into the issue saw their investment largely evaporate in front of their eyes weeks later as a result. Forgiveness is hard to find given that the share is currently the trading at £1.51.

In-between then and now, AO World — which pursues a high energy expansion strategy — has been faced with high start-up costs in Europe and a sharp slowdown in its normally rapidly growing sales in the fourth quarter of 2014.

Its latest trading statement, issued last week, is somewhat hopeful that this could pay off at some point. AO World managed to post a 35% rise in third-quarter revenue year-on-year. UK revenue grew by 24% vs 14% the previous year. Those figures might bode a smaller loss. 

Those are also somewhat redeeming numbers if you consider that, in the six months to 30 September, AO World reported a £8.9m operating loss (compared with a profit of £0.9m in the corresponding period in 2014), while revenue rose 21.7% year-on-year to £264.3m.

Long-term group performance remains in line with expectations, the company informed its shareholders last Tuesday. Apparently Black Friday week worked a lot of magic, which — in light of the revenue growth in the UK — does figure.

Even though I believe the share is set to explode the minute the company starts to deliver profits, given the generally strong levels of its revenue and sales growth, I am holding off at least another three months to scrutinise fourth-quarter numbers before potentially picking up a stock that could, in my opinion, turn into a money-spinner overnight.

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Angelique van Engelen has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Operating profits on target

The bookie’s group revenues fell 1%, but full year adjusted operating profits came in on target, £290m. The revenues were £1.59bn.

The company’s online division delivered 14% net revenue growth (£116m), and I believe this will continue to expand, especially if last December’s launch of its ‘Macau’ online casino emulates the success of its Vegas casino game. The latter reported 2015 Q3 revenue growth of 19% vs non-Vegas casino revenue of -17%.

Australia performance fundamentally sound

William Hill, the only UK gambling operator still not having found a merger partner and hence somewhat prone to hefty tax bills, suffered foreign exchange losses, as its Australia numbers show. But the company has made its mark in this notoriously difficult market by introducing its voice recognition technology to allow punters to confirm wagers placed via smartphones, something that will enhance its brand in the long term. The market disruptive technology has already been copied by its competitors.

Low p/e

Analysts’ average target price of the share is £407.47. With a P/E of 18, William Hill company is offering bargain value at the moment. So much so that at this level, it is a takeover target — also a reason why this stock needs watching.

Another risk is the Australian dollar sliding further (it is down 3.6% this year already). Bad exchange rates were a burden on William Hills’ profits, so keep an eye out for this.

Otherwise, I believe that this is a great value share at an incredibly low price.

NCC Group

Tomorrow (Friday, January 14th), cybersecurity company NCC Group (LSE: NCC) is reporting first half results, and its most recent trading update covering the first four months indicates that the group is going to be right on target.

NCC Group was included into the FTSE 250 on December 29th, having just raised £126 million in a share issue to buy Dutch company Fox-IT, which is intended to improve NCC’s threat analysis and fraud detection services.  

Revenue growth of 48%

Iin the four months until September, NCC posted revenue growth of 48% at £84 mn. Organic growth reached 17%, due mostly to sales jumps of NCC’s escrow and assurance services. By comparison, in 2014 group revenue grew 13% between May and September, and organic growth reached 13%.

In its trading statement, the company indicates its cash generative escrow business usually experiences its weakest trading period in May until September, but that it has seen especially strong activity during the period this year. NCC’s assurance division booked double digit organic growth driven by an expanding market. The company’s domain services division is expected to be its weakest link.

Fox-IT takeover

Fox-IT, which it just acquired, is a Dutch company employing the odd ex-spy and brimming with online banking talent, which outgrew the Netherlands a few years ago. It happens to stand guard over a number of US banks and various governments around the globe.

At a P/E of 37 it might seem slightly expensive, but with a proven track record of successful and fast integrating acquisitions, and an ever increasing market (cyber attacks won’t stop unless we abolish the internet) this company, in my opinion, will deliver excellent long-term growth.

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Angelique van Engelen has no position in any shares mentioned. The Motley Fool UK owns shares of NCC. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

The largest US producer of chromic acid warned last week that a strong dollar will hurt its 2016 export potential, and that slowing oil prospecting in the US means it can sell less of its product, which is used in the oil extraction as well as in the personal care industry.

It won’t get any easier 

This situation won’t turn around any time soon, because oil is likely to remain a problem area, as is the US dollar. These are two very significant factors undermining the potential of this otherwise great company, which was originally part of the Harrisons & Crossfield commodities trading group.

It seems to me that Elementis will not recover any time soon, but might see marginal improvement in its share price, which hit a new 52-week low (£207.30) last Thursday (7th January), if the dollar happens to play in its favour. And that is a big if.

Massive export risks

A strengthening dollar is a more likely possibility in 2016, and with up to 40% of Elementis’ US output being earmarked for export, FX risks are considerable, as is testified by producers from Russia and Kazachstan already making inroads into Elementis’ markets.

In recent months, most analysts have revised downward their target price for the stock, as the company first warned of problems last June. It is easy to believe that these revisions reflect the problems already, but the market is telling us another story. At the current P/E of only around 9.8, the company might offer long-term potential; however, time is not on the side of Elementis — the longer these external factors impact the company, the less competitive it will ultimately become.

Hill & Smith Holdings

A better pick in my opinion is Hill & Smith Holdings (LSE: HILS). Recent developments in global stock markets combined with the floods in North England warrant a re-examination of this stock. The road building company, which manufactures and supplies infrastructure products for utilities and roads and offers galvanizing services, will benefit from the repair work that inevitably will emerge soon.

Flood repairs

Flood repairs are estimated to amount to £2.3 billion. Hill & Smith’s infrastructure products’ road segment is especially likely to benefit from this, as it is involved in supplying temporary and permanent safety products to customers involved in the construction or maintenance of national roads infrastructure.

UK to invest £80 billion in infrastructure 

This comes on top of the planned re-launch of the powerful Road Fund by Chancellor Osborne, who has said he will scrap green car subsidies and put this money into UK roads. Earlier this week, Reuters quoted analysts as saying that the amount of the UK’s total infrastructure investments up to 2020 is £80 billion.

Outperformer

Hill & Smith Holdings trades at a P/E of 29 and, even though this is high, it reflects a strong trading year in 2015 and sound fundamentals. There is little doubt to me that the company is on track to meet or surpass its full-year expectations. The industrials sector company has seen its share price rise by around 21% over the past year alone. I believe it is a solid defensive play as well as an excellent growth opportunity.

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Angelique van Engelen owns shares in Elementis. The Motley Fool UK has recommended Elementis. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.