Unilever's Buyout Of Schmidt's Naturals To Bolster Portfolio

Progressing with expansion of natural products portfolio, Unilever (LON:ULVR) Plc (NYSE:UL) inked a deal to buy Schmidt’s Naturals. Headquartered in Oregon, Schmidt’s specializes in personal care products such as deodorants, toothpaste and bar soaps. Management expects Schmidt’s brands to compliment Unilever’s diverse natural products portfolio and prove to be a valuable inclusion in the company’s Personal Care Business.

Schmidt’s commands a strong portfolio of natural brands and has been delivering sturdy growth in the fast-paced natural products industry, courtesy of the company’s dedication toward innovation. In fact, Schmidt’s deodorants are popular for its award-winning formulas, extracted mainly from minerals and plants. While the transaction is likely to benefit Unilever, Schmidt’s products are also expected to gain from wide-spread sales channels in key global markets.

The terms of the agreement have been kept discreet by the companies. Further, the contract is expected to close by the end of the first quarter of 2018.

Other Acquisitions Driving the Stock

Unilever has been advancing well in the natural and organic products category, gaining from consumers increasing preference for such products. Rising consumer awareness regarding the harmful impacts of toxic chemicals has been driving the market share for organic personal care products. The recent deal with Schmidt’s is thus expected to further strengthen Unilever’s position in this category.

Apart from adding natural products brands in the beauty and wellness category, Unilever has also been fortifying organic foods portfolio. Evidently, Unilever entered into an agreement to acquire Brazilian natural and organic food business Mãe Terra in October.

Notably, Unilever has been focusing on bolstering and enhancing efficiency after the failed $143-billion takeover attempt by Kraft Heinz Co. (NASDAQ:KHC) earlier this year. Since then, the company has been undertaking several initiatives to improve performance.

To this end, this consumer products giant has been on an acquisition spree in the last few months, to bolster foothold in the beauty arena. In November, the company agreed to acquire New York-based Sundial Brands, a leading skincare and haircare brand. It also clinched a deal to buy cosmetics company Carver Korea for 2.27 billion euros in September. Incidentally, the beauty category has been witnessing high growth, on the back of social media content and diverse professional make-up techniques.

Investors are optimistic about Unilever’s consistent efforts to tap into prospective business areas and seize opportunities therein. Notably, shares of this Zacks Rank #2 (Buy) company have surged 39.7% in the past year compared with the industry’s gain of 17.6%.

Looking for More? Check These Trending Picks

Investors interested in the same sector may consider stocks such as Conagra Brands Inc. (NYSE:CAG) and Meredith Corp. (NYSE:MDP) , both carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Conagra Brands pulled off an average positive earnings surprise of 7% in the trailing four quarters. Also, it has a long-term earnings growth rate of 7%.

Meredith delivered an average positive earnings surprise of 7.1% in the trailing four quarters. It has a long-term earnings growth rate of 8%.

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