Essential consumer goods

As an introduction, PZ Cussons manufactures and distributes cleaning, hygiene, and toiletry products for consumers. Some of its best known brands include Imperial Leather, Carex, and Cussons Baby. I must admit I’m a user of many of its products in my household.

So what’s happening with PZ shares currently? Well, as I write, they’re trading for 194p. At this time last year, the stock was trading for 219p. This is an 11% drop over a 12-month period. Many UK shares have fallen as a direct result of increasing pressures, some of which I will explore in more detail shortly.

Challenges of note

The macroeconomic headwinds affecting many stocks, including PZ, include soaring inflation, the rising cost of raw materials, as well as the supply chain and energy crises. Combined, they have created a cost-of-living crisis here in the UK. The tragic events in Ukraine have also caused issues too.

For a business like PZ, rising costs, which could increase cost of production for its products, may eat away at profit margins, which underpin growth and shareholder returns.

In addition to this, supply chain constraints could see PZ unable to fulfil orders, and even stock shelves, which would in turn negatively affect sales and performance.

Lastly, the cost-of-living crisis may mean that some consumers may turn away from branded items that PZ sells. Instead, they may look towards cheaper alternatives, which could hurt its performance and returns too.

The positives and what I’m doing now

Away from the bearish aspects, there is lots to like about PZ Cussons, in my opinion. It’s current brand power, profile, and presence as a worldwide business, are key ingredients to its success now, and in the longer term. This is because the pandemic resulted in higher levels of hygiene and cleanliness consciousness throughout the world. For example, there probably isn’t a public space now that doesn’t have hand sanitiser at every entrance, exit, kiosk, or till. Overall, this could help boost performance and returns for a long time to come.

At present, PZ shares would boost my passive income stream through dividend payments. The current dividend yield stands at 3.5%. This is higher than the FTSE 250 average of 1.9%. I am conscious that dividends can be cancelled at any time, however.

Finally, I can see that PZ has a consistent track record of performance, which is encouraging. I am aware that past performance is not a guarantee of the future. However, looking back, it has recorded consistent levels of revenue and profit for the past four years.

To summarise, PZ Cusson shares could face some increased risk in the shorter term. Luckily for me, I invest for the long term, which means they look ideal for me and my holdings.

There isn’t any share that is actually recession-proof. But some will surely be more resistant than others. Today, I’m looking at two that I think have safety characteristics.

Soapy safety?

The PZ Cussons (LSE: PZC) share price is still depressed since the pandemic. We saw a mini recovery in 2021, as sales of the firm’s handwashing and sanitising products got a boost.

But that didn’t last. And we’re looking at a 12-month decline of 13%. So, Cussons is not exactly looking like pandemic-resistant safety, I admit. So why might it be recession-resistant?

Much of the weakness is surely down to the few years of falling earnings the company recorded before Covid arrived. And when something is already struggling, it’s likely to be hit harder by a general downturn.

Refocus

The refocus does seem to be paying off, with earnings growth returning in 2021. And, perhaps more importantly, the dividend was lifted by 5% after suffering a 30% cut in 2021.

That’s only a small rebound. But I find any dividend recovery at such an early rebuilding stage encouraging.

For the year ended May 2022, PZ Cussons says it expects full-year, like-for-like revenue growth of 3%. And that’s with 7% in the fourth quarter.

Forecasts put the dividend yield at 3%, which is still modest. And there’s still some way to go for the company to get back fully on track. So there is clearly risk here. But with a decent outlook heading into a likely recession year, I think PZ Cussons could be a long-term dividend buy.

Convenience food resilience?

Convenience food manufacturer Greencore (LSE: GNC), meanwhile saw earnings collapse in 2021. And its share price went with them. This time, we’re looking at a 12-month fall of 24%.

Forecasts suggests there’s a strong recovery on the way. Based on earnings for the year to September 2021, the stock is on a trailing price-to-earnings (P/E) ratio of 26. But analysts reckon that could halve this year, and keep on dropping over the next two years.

The dividend was canned in 2020, but forecasts suggest it will be back this year and could reach a 5% yield by 2024.

Q3 trading

The third quarter brought a pro-forma revenue increase of 26%, with 31% over the nine months. That’s against a tough prior year. But even compared to 2019, we saw a 14% rise for the nine-month period.

Greencore says it expects “adjusted EPS of between 9.2p and 10.0p“. On the current share price, that suggests a P/E of around 10. That’s even lower than analyst forecasts.

Again, we’re looking at a tentative recovery for a company that has suffered. And there’s no guarantee the upswing will continue, especially not heading into the current economic winds.

But again, I think there’s a safety aspect here, from the company’s position in the business of food to go. I’m holding.

• I’m looking for stocks with inflation-beating dividend growth
• Gaming, consumer goods and banking stocks are among my choices
• One of these companies has a 30-year track record of dividend growth

When I’m buying dividend stocks, I always take a look at the yield they offer. But with inflation expected to hit 5% in the coming months, I reckon dividend growth is more important than ever. A flat dividend income means my spending power will fall in the future. 

What I really want to do is to build a portfolio of shares that will deliver reliable dividend growth, year after year. Here are five income shares I’d consider buying for raising dividends in 2022 and beyond.

US growth story tempts me

Home emergency repair service provider Homeserve (LSE: HSV) is best known in the UK for the insurance policies it sells through utility partnerships. However, the real growth story here is the US market, where membership services are more popular than in the UK or Europe.

During the six months to 30 September, profits from Homeserve’s US business rose 11% to £32.5m, while customer numbers rose 8% to 4.8m.  This business generated 65% of the group’s operating profit during the period.

My main concern as a potential buyer is Homeserve’s rising level of debt. This has lifted sharply in recent years as the group has funded acquisitions and new projects.

However, I’m still comfortable with the risk, given the group’s strong cash generation. Homeserve’s recent share price slide prices the stock on 14 times earnings, which looks reasonable to me. The shares also offer a 3.8% dividend yield that’s expected to rise by 11% this year. This dividend stock is on my shortlist to buy for my portfolio.

A top choice for gamers

Shares in wargaming specialist Games Workshop (LSE: GAW) have risen by 880% over the last five years. This impressive share price performance means that this old-school company has significantly outperformed popular video gaming stocks such as Keyword Studios (+310%) and Team17 (+210%) since 2017.

Games Workshop relies on an unusual combination of shops and online presence to draw customers.

An additional profit stream comes from royalties. Games Workshop is starting to exploit the potential of its intellectual property through video game and television deals. Royalty payments doubled from £9m to £20m during the six months to 28 November.

The main risk I can see for shareholders is that sales growth recorded in recent years won’t be sustainable. I don’t know how likely this is — I’m not a customer.

However, the company’s high profit margins, excellent cash generation and long track record suggest to me that Games Workshop could remain an attractive dividend stock. The dividend is expected to rise by 11% this year, giving a 3% yield. I’m definitely interested.

A defensive dividend stock

FTSE 250 firm Cranswick (LSE: CWK) doesn’t get many headlines. But this meat producer has delivered unbroken dividend growth every year since 1988. Over the last six years, dividends have risen by an average of 13% per year, providing excellent protection against inflation.

Of course, there’s no guarantee Cranswick’s performance will be sustainable. Growing concerns about the environmental impact of large-scale meat production are a potential worry. And I’m not totally sure that the company’s recent decision to expand into pet food is a good idea.

However, Cranswick’s long track record of growth is attractive to me. I’m also tempted by the defensive nature of the group’s products. The group is a big supplier to supermarkets and sales are generally stable, even during a recession.

Cranswick shares don’t look especially cheap to me, trading on 17 times forecast earnings with a 2% dividend yield. But the group’s 30-year track record of dividend growth is unusual in the UK. This is a stock I’d like to own.

The best bank?

The big FTSE 100 banks tend to grab most of the headlines. But they haven’t delivered very good results for shareholders since 2008. For my portfolio, I’ve chosen to own FTSE 250 merchant bank Close Brothers (LSE: CBG).

Close Brothers’ share price has risen by 145% since February 2009, compared to a gain of just 50% for Lloyds Banking Group.

This group has been in business since 1878 and specialises in commercial lending and automotive finance. Profit margins are much higher than at high street rivals and the bank’s management has avoided the costly mistakes made by larger peers.

Shareholders have benefited from this careful management. Close Brothers didn’t cut its dividend during the financial crisis. Indeed, until the pandemic, the bank hadn’t cut its payout for more than 30 years.

Future dividends are never guaranteed and Close’s exposure to property and business lending could lead to big losses during a recession. But the bank’s long track record gives me confidence. I’m also tempted by this stock’s 5% dividend yield and expected growth. I’m happy to have this banking share in my portfolio.

An overlooked dividend stock?

My final pick is consumer goods group PZ Cussons (LSE: PZC). This business is known for brands such as Carex and Imperial Leather and operates globally.

Profits have dipped this year as sales of Carex sanitiser and handwash return to normal levels after record sales during the pandemic. But the performance of the group’s remaining business is improving under newish chief executive Jonathan Myers.

The CEO took over at a difficult time for the group. PZ Cussons’ product portfolio had become confused, there were problems in Africa, and growth had stalled. It’s too soon to be certain that Myers simplification strategy will return the business to growth. But my impressions so far are positive.

After surging higher during the pandemic, PZ Cussons’ share price has pulled back. The stock now trades on 14 times forecast earnings, with an expected dividend yield of 3.3%.

Although dividend growth is expected to be limited this year, I see this business as a good long-term pick for inflation protection, due to the essential nature of many of its products.

Here are three cheap UK shares I’d consider buying if they fall far in price. Each currently changes hands for less than £3.50.

A defensive hero

We have to spend to fill our bellies even when broader economic conditions worsen. This is why I think Devro (LSE: DVO) could be a top stock to buy if it falls amid a broader stock market crash. This cheap UK share manufactures sausage skins that it sells across developed and emerging markets.

I’ve long liked Devro because of the massive investment it has made in fast-growing developing territories, China, in particular. Meat demand in these geographies is tipped to keep rising strongly as personal income levels rise. Indeed, Devro’s latest financials said that it enjoyed strong growth in Latin America, the Middle East, and Africa during the four months to October. I’d buy the business despite the threat posed to its operations by the growing popularity of vegetarian and vegan diets.

Riding the petcare boom

People in Europe are spending more and more money to keep their companion animals happy and healthy. This is what makes Animalcare Group (LSE: ANCR) such an attractive stock in my book. Analysts at the Business Research Company think the global animal medicine market will be worth $85.1bn by 2030. That compares with the $42.5bn it was estimated at in 2019.

I am aware, however, that Animalcare (like Devro) could be hit by the rise of meat-free diets. This is because the business supplies medicines for livestock as well as for pets in Europe. Indeed, a report by Smart Protein over the summer showed that 46% of Europeans had reduced their meat consumption on a 12-month basis. Still, I think the bright outlook for the petcare market offsets this threat.

A consumer goods colossus

I bought Unilever shares because I considered it to be a relatively secure place to park my money. Products like Dove soap, Magnum ice cream, and Domestic bleach give it a market-leading position in ultra-defensive food and household and personal goods markets. I am also considering snapping up PZ Cussons (LSE: PZC) for my portfolio because it shares the same qualities. Brands like Imperial Leather soaps have been excellent sales generators for the business for decades now.

PZ Cussons has a great track record of innovating its powerhouse labels to keep consumers interested. And it has supercharged marketing investment in the likes of Imperial Leather, too. I also reckon the business will benefit from changing consumer attitudes towards hygiene following the Covid-19 outbreak. Despite the threat of rising raw material costs, I think PZ Cussons (like Unilever) could thrive even if the economic recovery runs out of steam.

High passive income options

Two companies that operate in the same area are CMC Markets (LSE:CMCX) and Plus500 (LSE:PLUS). Both are retail trading and investment platforms. They offer a range of services across the investing spectrum. For example, spread betting is a leveraged way of buying or selling stocks, FX, and other instruments. This is a high-risk way of trading, but with potentially high rewards. 

During the pandemic, the volatility in financial markets saw a surge in account openings and trading activity for both companies. Money is made by taking a small spread off each transaction. So the more that clients trade, the more profitable it is for CMC and Plus500.

As a result, both companies were able to pay generous dividends out of the profits during this period. In terms of passive income, both FTSE 250 stocks have a dividend yield above 6%. This puts both within the top 10 highest yielding stocks within the index.

The risk here is that both companies need to adapt to keep the growth going. If retail participation slows, they need to be able to generate revenue from other sources, such as ISAs, more crypto offerings, and other services. The client base that has been generated is golden, but these companies need to ensure clients remain active, otherwise revenue will dry up during quieter times.

Defensive FTSE 250 stocks

Another area within the FTSE 250 for passive income ideas is within consumer staples, for example, PZ Cussons (LSE:PZC) and Tate & Lyle (LSE:TATE). PZ Cussons owns brands such as Carex and Imperial Leather. Tate and Lyle is a well-known sugar supplier.

Both companies should continue to offer me good dividends into the future. By nature of the products sold, customer demand should remain constant irrespective of what happens to the UK economy in the coming year. I say this because there are concerns about the negative impact of the current political situation, Brexit issues, high inflation, and so on.

Even if all of these things blow up, I’ll still need to buy sugar and soap! This is one reason why I’m happy to consider buying shares in both FTSE 250 stocks.

The risk here is that supply chain disruption could hamper stock levels even if demand is present. In fact, in a recent result presentation, Tate & Lyle noted that sweeteners and starches profit was down 13% “due to cost inflation and operational and supply chain disruption”. If this continues, then it could hamper future dividend payments.

Ideas for right now

Overall, I’m considering buying shares in all four of these passive income ideas. The FTSE 250 stocks offer me alternatives to the main index, and I think there’s good value to be had.

The consumer goods giant hasn’t had things all its own way in more recent years, however. Sure, the pandemic gave sales of its soaps a significant boost over the last 18 months or so. But the problem of soaring costs and particularly harsh economic conditions in its crucial Nigerian market has had more of an impact on investor returns in recent years. PZ Cussons was forced to rip up its progressive dividend policy a few years back as profits sank.

PZ Cussons isn’t out of the woods just yet. Cost inflation remains a big problem, while currency headwinds also pose an ongoing threat. But under new chief executive Jonathan Myers, I think the business could be on the cusp of recovery. Unusually for the business it sourced external candidates to fill the role of CEO. I think Myers, who has a 20-year stint with Proctor & Gamble on his CV alongside shorter stints with Kellogg’s and Avon, could be the person they’ve been looking for.

Dividends rise again!

Recent news flow coming from PZ Cussons of late suggests that the ship is indeed beginning to turn around. In July, the business hiked its full-year profits forecasts for the period then just ended (to May 2021), thanks in large part to a 7% year-on-year revenues jump. Adjusted pre-tax profit ending up soaring 11% year-on-year, to £68.6m.

Rising sales weren’t the only cause for celebration. Adjusted operating margins at the business rose 60 basis points year-on-year to 11.8%. Net debt levels at the company have also been falling rapidly. These dropped almost £19m in the 12 months to May, to £30.7m.

The business had the confidence to resurrect its progressive dividend policy following last year’s strong all-round result. It raised the full-year payout to 6.09p per share from 5.8p the year before. Could there be more to come?

Why I’d buy this cheap UK share

All things considered I think PZ Cussons could be a great, dirt-cheap share for me to buy. The eternal popularity of its megabrands remains a big pull, and especially as the business is turbocharging investment in them to help them retain their allure. Marketing spending on these so-called ‘must win brands’ jumped 40% in fiscal 2021.

I also like PZ Cussons’ broad geographic footprint that gives it excellent long-term sales opportunities. As I say, trading in Nigeria has been a problem of late and could continue to be problematic. However, I think its broad wingspan across emerging markets will reap huge rewards on a broader basis as personal wealth levels rise. And this could help make investors like me terrific returns.

Ashmore (LSE:ASHM) was on a storming run before Covid-19 arrived. It’s shares were on a 12-month gain of 40% immediately prior to the crash. Ashmore is an investment manager specialising in emerging markets. Yes, those emerging markets, hard hit by the coronavirus and lacking the first-world resources to deal with it.

It’s no surprise then that since mid-February 2020, the Ashmore share price is down nearly 30%. The FTSE 250 index meanwhile, has recovered to a 10% gain. On the upside though, times like these can provide great opportunities to invest in quality companies while they’re cheap. That is, providing they survive with sufficient liquidity.

Ashmore looks to be in a strong position on that front, and assets under management grew in the fourth quarter. Full-year results are due on 3 September, so we’ll know more then. Investing in emerging markets is risky at the best of times, and they may be the slowest to properly recover. But Ashmore is on my growing shortlist.

Pills and potions profits

Some pharmaceutical companies have done well during the pandemic, some not so well. Dechra Pharmaceuticals (LSE: DPH) is firmly in the first group. Its shares are up 75% over two years, and up nearly 300% over five. But what’s so surprising about that during Covid-19 days?

Well, the FTSE 250 veterinary medicines specialist isn’t even in the human market, never mind anything to do with coronaviruses. All this progress has come from its work for cats, dogs and horses. It’s clearly a lucrative market, as July’s year-end trading update makes clear. Revenue rose by 18%, with strong international progress. European revenue grew 20%, with a 22% increase in the USA.

The risk is that Dechra shares might be overvalued now, and they do seem to be pushing their way to high-growth P/E multiples. Should we see a future period when the figures fail to meet expectations, could the share price fall? It might. But I’m going to wait for full-year results on 6 September before I make up my mind.

Lagging the FTSE 250

If the financial and pharmaceutical sectors carry high risk, surely soap is a safe business? That’s what I think when I look at PZ Cussons (LSE: PZC), ahead of final results due on 22 September. The problem is, we’ve seen earnings deteriorating for the past few years, with a corresponding dip in the dividend.

But in its July update, the company said pre-tax profit is “expected to be ahead of consensus and the prior year.” Revenue is up 7%, margins are improving, and the balance sheet is apparently better too. Cussons says net debt is falling, and lower than last year. I’ll need to see the actual numbers, but I find that encouraging.

The share price has badly lagged the FTSE 250 over the past five years, dropping nearly 30%, while the index has grown by a similar percentage. Over the past two years though, the two are closer. Is Cussons good value now? I’ll make my mind up when I see the results.

FTSE 250 growth

The first on my list is drinks group Britvic (LSE: BVIC). As the economy has opened up, consumers have flocked to restaurants and cafes around the country. Other hospitality businesses such as theme and leisure parks have also reported strong demand.

I think this could translate into strong sales growth at the FTSE 250 company. Indeed, while the business has expanded its ‘at home’ sales channel over the past year, sales to the hospitality industry still account for a large percentage of revenues.

Reported revenue decreased 6.3% for the six months ended 31 March 2020, due to pandemic restrictions. However, management has already said trading in the first few weeks of April, when hospitality businesses began to reopen, was “encouraging.”

As such, I think Britvic should see a strong recovery in sales this year. That should translate into higher earnings and, as a result, a higher share price. In the meantime, the stock supports a dividend yield of 2.3%.

Despite its opportunities, the company faces risks as well. These include competition and rising prices. The former could lead to reduced sales, and the latter could depress profit margins. Both of these drawbacks could impact the group’s dividend plans.

Still, considering its recovery potential, I’d buy the FTSE 250 stock for my portfolio.

Pandemic winner

PZ Cussons (LSE: PZC), which counts the Imperial Leather soap brand as one of its primary products, has faced mixed fortunes over the past 12 months. Higher demand for its cleaning brands has offset reduced sales elsewhere in the business.

The company is reinvesting its windfall profits back into the business, increasing marketing and using additional cash to reduce net debt. At the end of February, net debt was £35m, down from £116m a year ago.

I’m also encouraged by the FTSE 250 company’s new CEO. Jonathan Myers joined the company in May, and he’s the first boss to come from outside the enterprise. I think his involvement may bring some new thinking to the business. Therefore, I believe now could be an excellent time to buy the stock as the new CEO starts to make his mark.

Unfortunately, as well as this opportunity, the company also faces risks and threats. Like Britvic, these include competition and the potential for higher costs. What’s more, PZ Cussons’ African division, which accounted for around 36% of sales in the first quarter, has been relatively unreliable in the past.

For example, in the company’s most recent quarter, revenues at the African business increased 3.2%, but adverse currency movements almost wiped out this growth. After currency movements, sales declined 7%.

Even after taking this risk into account, I’d buy the stock and its 2.3% dividend yield today.

Considerable appeal

Medical products and technologies company ConvaTec (LSE: CTEC) is a FTSE 250 share I think has considerable appeal. For one thing, it’s a geographically diversified global business. For another, it has leading market positions in the areas it focuses on. Namely, advanced wound care, ostomy care, continence & critical care, and infusion care.

CTEC reported a “strong” performance in the three months to 31 March. Group organic revenue increased 6.7%. And all its business segments contributed to the growth. In addition, management said it “executed effectively” on its strategic transformation, as it targets sustainable and profitable growth.

Trading at 25 times trailing earnings, the market is pricing CTEC for successful delivery of its strategy. Nevertheless, there’s a risk the “significant number of strategic initiatives” the company is pursuing won’t deliver the anticipated growth. If so, the shares could de-rate to a lower earnings multiple. However, I found last week’s update highly encouraging, and I think CTEC could be a good long-term investment for me.

FTSE 250 shares #2

Howden Joinery (LSE: HWDN) is the UK’s leading trade supplier of kitchens. I think its scale and specialisation are competitive advantages. It still has growth to go for in the UK, but is also expanding from a low base in France and Belgium.

Last week’s trading update was for the 16 weeks to 17 April. It was no surprise to see massive increases in revenue compared to the same period last year, which was hit hard by the first Covid lockdown. However, I was impressed by comparisons with the pre-pandemic period in 2019. UK revenue increased 13% (or 9% on a same-depot basis). European revenue increased 38% (or 20% on a same-depot basis).

There are a number of risks to HWDN’s prospects. These include the cyclicality of the construction sector, notably residential housing. Also, the expansion into Europe is still at too early a stage to be sure it’ll be a success. On balance though, I think this could be another good long-term investment for me. HWDN is trading at 32 times last year’s pandemic-depressed earnings.

FTSE 250 shares #3

I’m a big fan of the power of consumer goods brands. PZ Cussons (LSE: PZC) has a strong stable of them. They include Carex, Imperial Leather and St Tropez. The company also has attractive international diversification across both developed and emerging markets.

Last week, PZC reported a 4.7% increase in revenue (at constant currency) for the 13 weeks to 27 February. I liked that all regions grew revenue and profit. This continued the “renewed momentum” in the business after a long period of struggling for growth under its previous chief executive.

PZC has been investing heavily behind its brands in the initial phase of the new CEO’s strategy to return to sustainable profit growth. As it’s still early days, there’s no guarantee the recent momentum will continue. As with CTEC, the shares could de-rate if the strategy doesn’t deliver the growth implied by PZC’s rating of 21 times trailing earnings. However, I like the company’s brands and the new CEO’s approach. As such, this is another FTSE 250 share I think could be a good long-term investment for me.

It’s clear that the pandemic has reset all our demands when it comes to maintaining a decent level of cleanliness. As a consequence, this UK share should expect demand for its soaps, its shower gels, washing liquids and laundry detergents to remain robust.

Fresh financials from fellow UK fast-moving consumer goods (FMCG) share Reckitt Benckiser this week illustrates how rapidly personal and home hygiene products are flying off the shelves. The FTSE 100 business said that like-for-like sales of its hygiene products rocketed almost 20% year-on-year in 2020.

It’s a phenomenon that Reckitt expects to continue too. It says that “new consumer behaviours are becoming engrained” and that “concern remains that new variants will need a sustained high level of hygiene to ensure control.” The company says, too, that four in five people globally say they intend to keep these better hygiene habits going.

On brand

The growing importance of personal and collective hygiene isn’t the only thing that should boost PZ Cussons either. This UK share, through old and beloved labels like Imperial Leather and Carex soaps and bath products, benefits from the brand power of such products. These can usually drive the top line during good times and bad. And the importance of having a strong brand could be more important now than ever.

As Stephen Rogers, managing director at the Consumer Industry Center, recently told Deloitte: “In a time of so much uncertainty, when daily decisions about personal safety and financial wellbeing are made, most consumers are reaching for brands they trust.”

But this spike in brand loyalty enduring at an elevated level is by no means guaranteed. Yes, brand power has become more important since the pandemic struck. But heavyweight brands have major competition too. Deloitte notes that “traditional brands have been losing ground to private label and niche brands over the past decade.”

So despite its undeniable brand strength, PZC needs to work hard to keep those labels relevant and not assume they’ll stay in demand.

There are also other issues that cloud PZ Cussons’ long-term outlook. Nigeria is one of the UK share’s most important markets, a region in which sales have suffered in recent years due to struggling oil prices. The rising use of green energy, could have a significant indirect effect on product sales here in the years ahead.

A strong UK share

I still think that PZ Cussons is an attractive FTSE 250 share today for Stocks and Shares ISA investors like me. City forecasts can fail to live up to reality, of course. But brokers reckon earnings here will rise 1% and 8% in the financial years to May 2021 and 2022 respectively. This leaves the FMCG giant trading on a forward price-to-earnings (P/E) ratio of around 25 times.