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Anybody who buys Unilever (LSE:ULVR) shares earlier than the inventory market opens on Thursday (6 November) will get a 39p per share dividend subsequent month. Anybody who buys it after, doesn’t.
That makes it appear easy — anybody serious about shopping for Unilever shares ought to do it earlier than Thursday, proper? If solely investing had been so simple…
The inventory market
By itself, the inventory going ex-dividend on Thursday is a non-issue when it comes to when to purchase. Traders can anticipate the share worth to regulate accordingly on the day.
Different issues being equal, Unilever shares might be price 39p lower than they had been the day earlier than. And that is one thing that’s prone to be mirrored within the share worth.
The inventory market isn’t 100% environment friendly. However buyers ought to assume it’s able to processing exact publicly out there data introduced over a month in the past.
Even when Unilever shares go up on Thursday, it will nonetheless mirror the actual fact the agency is dedicated to sending out 39p per share. There are, nonetheless, different causes to think about shopping for.
Resilience
There’s loads to love about Unilever. It makes merchandise individuals want and it’s unlikely to search out itself disrupted by synthetic intelligence (AI).
GPT-5 lets customers construct programmes that assist them study languages and create their very own AI brokers. However they will’t eat it they usually can’t use it to scrub their homes.
So Unilever is unlikely to face a lot competitors from AI opponents. And the markets it sells into are prone to develop over time as the worldwide inhabitants will increase.
The agency’s largest problem is that – not like software program companies – switching prices for purchasers are very low. However Unilever has some distinctive benefits for managing this threat.
Scale
Among the best methods for a corporation to distinguish itself is by working at scale. This may flip what would in any other case be an unremarkable enterprise into an excellent one.
Within the case of Unilever, its scale offers it a bonus in terms of negotiating with suppliers and retailers. And this units it aside in an business with low switching prices.
In different phrases, limitations to entry for opponents are low – it isn’t that tough to begin a shopper merchandise enterprise. However it’s troublesome to match the benefits Unilever’s scale offers.
That’s why the corporate has been such a constant supply of dividends over time. And whereas it stays intact, I feel it’s properly price contemplating for passive revenue buyers.
Dividend investing
There are good causes to consider shopping for Unilever shares proper now. However none of these is in regards to the inventory going ex-dividend later this week.
Traders who purchase from Thursday onwards gained’t get the December dividend. That by itself, nonetheless, isn’t a motive to hurry out and purchase within the subsequent couple of days.
The corporate might be price 39p per share much less when the inventory goes ex-dividend. And since that is well-known public data, buyers ought to anticipate the market to issue this in.
