Unilever dividend to be in focus as it hopes to retain defensive credentials

Unilever, Meggitt and Taylor Wimpey are among the notable names in Thursday's diary.

Unilever PLC - Unilever dividend to be in focus as it hopes to retain defensive credentials
image source: rohaizadabu / Shutterstock

Unprecedented levels of handwashing probably bodes well for hygiene and consumer goods blue-chip Unilever PLC (LON:ULVR).

It is typically something of a defensive stock in times of trouble, and, its portfolio of everyday essentials has meant it has held up relatively well in the current turmoil.

Consumers still need the basics despite the coronavirus lockdown. So, with its first-quarter trading update due on Thursday, investors will be keeping an eye on the company.

The dividend, which was expected to be increased by 9% this year, will be very much in the spotlight although investors will also be eyeing the company’s South Asian business to see if a slowdown there has continued.

The decrease in sales in the region will also be watched closely for any impact it may have on Unilever’s sales forecasts after the group said it still expects to achieve growth at the lower end of the 3-5% range it has guided for.

Meanwhile, there may also be interest in any progress being made in the review of the company’s tea business, which includes brands such as Lipton and PG Tips, after the group hung up the ‘for sale’ sign for the division at the end of January.

Was scrapping the dividend worth it for Meggitt?

Meggitt PLC (LON:MGGT) is publishing a trading update on Thursday.

Investors may have been bracing themselves considering the FTSE 100-listed group’s exposure on aerospace, one of the hardest hit sectors by the coronavirus pandemic.

The manufacturer scrapped its dividend late last month alongside other cost-cutting measures, which investors will want to hear updates on.

The market is eager to know how the quarter has panned out, and perhaps how plans to build medical ventilators for the NHS are developing.

Taylor Wimpey to update on cost-cutting measures

Like many housebuilders, Taylor Wimpey PLC (LON:TW.) has been forced by the virus lockdown to shut all of its constructions sites and sales offices, as well as slashing costs to preserve cash.

Though a statement was made at the start of April, there should be a quarterly trading update on Thursday, where there should not be many surprises about trading up until the lockdown.

It’s unlikely that the company can say much more than it has already, with no visibility on the outlook.

In a wider note on the housebuilding sector, broker Liberum said the companies have “learned the lessons of the GFC well and came into this crisis with strong liquidity positions”, which have been strengthened for all but one company scrapping their dividends, while some have qualified for the government’s corporate finance fund.

“We estimate that the companies now have sufficient liquidity to last from 12 to 92 months without revenue,” Liberum’s analysts said.

Thursday 23 April

Trading announcements: Unilever PLC (LON:ULVR), Meggitt PLC (LON:MGGT), Taylor Wimpey PLC (LON:TW.), Relx PLC (LON:REL), Anglo American PLC (LON:AAL), Tullow Oil PLC (LON:TLW), Gear4music Holdings PLC (LON:G4M), AJ Bell PLC (LON:AJB),

Finals: Walker Greenbank PLC (LON:WGB)

FTSE 100 ex-dividends to knock 3.4 points off the index: Legal & General Group PLC (LON:LGEN), Spirax-Sarco Engineering PLC (LON:SPX), Antofagasta PLC (LON:ANTO)

Economic data: UK retail sales, UK flash PMIs, US jobless claims, US flash PMIs

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