ULVR has raised $1.5bn in the US by issuing two unsecured notes - $0.5bn over 5 yrs at 2.8% and $1bn over 10 yrs @ 4.3%. This does look to be good low cost finance for the company.I tend to agree that ULVR has got some nice low-cost debt. Might as well raise money whilst it's cheap.
I purchased ULVR earlier this year, being attracted by its reasonable dividend (now yielding nearly 4%), and good returns on equity. I think the debt position is reasonable given its highly defensive nature. I look for interest cover of at least 3, and debt covered 5 times by net income in these types of companies. So ULVR gets a pass. ULVR is currently trading on a PE of 14 - not deep value territory by any means - but it is a good solid company and I'm paying about the market average. I'm not expecting to shoot the lights out with ULVR, but it has a good dividend, and is nice and defensive.
Anaylsts estimate 9% earnings growth for 2011, and another 9% growth in 2012, which seems like quite an acceptable return given the nature of the business and current earnings. It would be nice to buy the company a little cheaper, and in fact it is down in price since I bought it earlier this year, but I am not fearful.
There seem to be murmurrings that input prices will go up, which are probably not in analyst forecasts; so we'll have to see how this plays out. If I have made a mistake on this share, I don't think I have made a major one. My downside on this one is that I think I'll be disappointed, not devestated.