Reckitt Benckiser (NYSE:RBGLY)

Reckitt Benckiser is a British company that manufactures and distributes household and pharmaceutical products. It was formed from the merger of the British company Reckitt & Colman and the German company Benckiser. Colman was founded in 1814, while Reckitt & Sons began its starch business in 1840, before expanding diversify into other household products. In 1938, it merged with J & J Colman to become Reckitt & Colman Ltd. The latter merged in 1999 with Benckiser to become the company we know today. Currently the world number 1 in household cleaning products, It is considered one of the best companies of all time.

Reckitt Benckiser today owns a wide range of brands having a significant reputation and market share in the countries where they are distributed. The company has 19 strong brands, among which we can cite Airwick, Calgon, Cillit Bang, Harpic, Vanish, Veet And Woolite for cleaning products, and Strepsil, Gaviscon, Nurofen, "Lutsine" and Biactol-Clearasil for pharmaceutical products. These are a strategic priority for the company, thanks to the significant growth potential linked to the aging of populations, the development of self-medication and the possibilities of delisting molecules. Reckitt Benckiser also owns a large number of local brands, specific to one or two countries, such as Green House, Baranne, Biactol, St Mark Or Destop In France.

The title is part of the strategy Ex-US International ETFs and Dividend Stocks demon portfolio. For technical convenience, the analysis refers to the stock listed on the New York Stock Exchange (RBGLY), but it is equally valid for the one listed in London (RB). Reckitt Benckiser's current yield, at nearly 2.8%, remains correct and not too far from its long-term average (3.35%), which is already attractive. This is not so bad if we take into account the current strong market valuation. With 12.64% of average annual growth, the dividend offers attractive prospects for future income, especially since the distribution ratio is only 52%.

Due to its sector of activity and the diversity of its products, Reckitt Benckiser remains very little sensitive to economic variations. The beta is thus only 0.36, while the volatility amounts to 15.28%. In addition, with products sold in more than 200 countries, the company subtly manages to free itself from currency risk. The $risk, with -0.21, thus underlines that the title is little affected by variations in the dollar. Its value in CHF would even have a slight tendency to increase when the greenback weakens. This is not always obvious for globalized European companies that enter into competition with American majors, which benefit from a weak dollar.

In the end, Reckitt Benckiser receives four stars, or a very good risk/return ratio. The stock's dividend is generous without, however, calling into question the growth potential of future distributions. In addition, the stock allows you to sleep soundly, with low monetary and market risk, thanks to a defensive orientation and a diversified portfolio of strong brands, sold across a large number of countries.

Sources: Wikipedia, Wikinvest, Yahoo Finance, dividends.ch