Morningstar also has four-star ratings on U.K. retailer Tesco and Dutch staples giant Unilever (NYSE: UN). “With its robust cash flow (free cash flow amounted to 9.5% of sales in fiscal 2012), we think Unilever (which is attractively valued) to continue investing behind its brands, pursuing acquisition opportunities as they arise, and returning excess capital to shareholders,” said Morningstar.
Nestle, Unilever and Tesco combine for 11.4% of KXI’s weight. Morningstar has fair value estimates of $45 on Coca-Cola and $93 on Philip Morris, implying decent upside from current levels for both stocks. Those are KXI’s third and fourth-largest holdings, respectively, combining for 9.4% of the ETF’s weight.
iShares Global Consumer Staples ETF
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of Coke and Procter & Gamble.