Why I'm bullish on Unilever plc, Dixons Carphone plc and N Brown Group plc

A positive outlook

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Shares in online-focused fashion retailer N Brown(LSE: BWNG) have risen by up to 7% today after it released an upbeat set of first quarter results. Although revenue declined by 0.2% versus the same period of the prior year, N Brown reaffirmed its guidance and this seems to have improved investor sentiment in the stock.

Encouragingly, the fall in revenue was a marked improvement on the 3.5% decline reported in the previous quarter. And with N Brown stating that it has seen a continued increase in online sales penetration and strong performance from a number of its key brands, its medium term outlook remains positive.

And with N Brown forecast to increase its bottom line by 1% in the current year and by a further 9% next year, its current valuation is difficult to justify. That's because while the UK retail sector is enduring a highly uncertain period, N Brown has a price-to-earnings (P/E) ratio of just 9.5. This indicates that there is considerable upward re-rating potential ahead, thereby making now a sound opportunity to buy a slice of the business for the long term.

Cheap, given its potential

It's a similar story for retail sector peer Dixons Carphone(LSE: DC). It has tremendous potential to grow its bottom line in the coming years as the development of the internet of things space continues. We are living in an increasingly interconnected world and Dixons Carphone appears to have the size, scale and financial firepower to tap into growth in more intelligent appliances.

With Dixons Carphone forecast to increase its earnings by 13% in the current year and by a further 11% next year, investor sentiment looks set to rise over the medium term. That's especially the case since Dixons Carphone trades on a price-to-earnings growth (PEG) ratio of only 1.1, which indicates that it is cheap given its long term growth potential.

Excellent defensive growth prospects

Meanwhile, Unilever(LSE: ULVR) remains a top notch consumer goods play for the long term. A key reason for this is the company's diversity. For example, it operates across the globe, having huge exposure to emerging markets (from which it generates the majority of its sales) as well as from developed nations. This means that if there is a slowdown in one part of the world, Unilever's exposure to other regions can help to pick up the slack.

Furthermore, Unilever is also well-diversified when it comes to the products it sells. Its portfolio ranges from personal care products to food and this provides it with a highly defensive earnings growth profile. And with Unilever expected to grow its bottom line by 8% in the next financial year, it appears to offer excellent defensive growth prospects. Given the uncertain outlook for the world economy, this could prove to be a major ally over the medium term and Unilever's shares may rise in value as a result.

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Peter Stephens owns shares of Unilever. The Motley Fool UK owns shares of and has recommended Unilever. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.