Are Diageo plc, Unilever plc & PZ Cussons plc about to crash?

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Unilever(LSE: ULVR) is one of the FTSE 100's most expensive stocks. Indeed, the company's shares currently trade at a forward P/E of 21.7, which is a relatively high valuation for a slow and steady company like Unilever.

Next year, City analysts are projecting earnings per share growth of 8% for the consumer goods champion indicating a PEG ratio of 2.6 -- a PEG ratio of less than one implies that the shares in question offer growth at a reasonable price. That said, when it comes to yield Unilever's forward dividend yield of 3.1% is only 0.7% below the FTSE 100 average of 3.8%. The payout is covered one-and-a-half-times by earnings per share.

High price, no growth 

Unilever isn't the only FTSE 100 company that is trading at a premium valuation despite lacklustre expectations for growth. Diageo(LSE: DGE) is another culprit. Diageo's earnings per share have fallen by around 15% since the end of the company's 2013 financial year. City analysts expect the company to report a further 1% decline in earnings this year. 

Still, despite Diageo's shrinking income the company's shares currently trade at a forward P/E of 21.1. Analysts have pencilled in earnings per share growth of 8% for the year ending 30 June 2017, so on this basis, the group is trading at 2017 P/E of 19.6, which still seems relatively expensive. The shares currently support a dividend yield of 3.1%, and the payout is covered one-and-a-half-times by earnings per share.

PZ Cussons(LSE: PZC) is another consumer goods company that is trading at a high multiple despite sluggish earnings growth. City analysts expect the group's earnings per share to fall by 6% for the year ending 31 May 2016 but despite this downbeat forecast the company's shares are currently trading at a forward P/E of 19.6. Analysts have pencilled in estimated earnings per share growth of 3% for the year ending 31 May 2017, implying that the group is trading at a 2017 P/E of 19.2. The shares currently support a dividend yield of 2.4%, and the payout is covered 2.2 times by earnings per share.

Time to sell?

Diageo, Unilever and PZ Cussons are all currently trading at premium valuations. But are these valuations warranted?

Well, consumer goods companies are generally considered to be the most defensive investments around. In a time of great economic uncertainty, investors are often willing to pay a premium to get their hands on the shares of defensive companies. It looks as if this is the trend that is currently playing out at Diageo, Unilever and PZ Cussons. Investors have been clamouring to get their hands on the shares of these companies at any price and it's likely that this trend will continue. 

Overall, it looks as if the time being these companies aren't about to see their share prices collapse. But if there is any change in market or economic sentiment, re-rating could be on the horizon.

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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK owns shares of PZ Cussons. The Motley Fool UK has recommended Diageo. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.