It’s nearly a yr since I ejected Unilever (LSE: ULVR) from my Self-Invested Private Pension, and I can’t say I’ve missed it. I’ve simply observed that its shares go ex-dividend on Thursday (26 February). Any investor contemplating the FTSE 100 inventory could be tempted to purchase earlier than then, to safe the following payout. So is it price shopping for at the moment?
On 12 February, Unilever declared a quarterly interim dividend of 46.64 euro cents (40.52p) per share. Anybody shopping for earlier than the ex-dividend date will get that on 10 April. This isn’t probably the most dazzling revenue inventory on the FTSE 100. The present trailing yield is round 3.1%. Nonetheless, administration has a reasonably respectable monitor report of elevating shareholder payouts over time.
Unilever has elevated shareholder payouts yearly this millennium, bar the monetary disaster in 2009 and freezes in 2022 and 2023 when the dividend held at 170.72 euro cents. It’s since edged as much as 175.88 cents in 2024, then 182.48 cents in 2025. The yield isn’t large however the revenue stream appears resilient. As ever, although, there are not any ensures.
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FTSE 100 revenue progress inventory
The share worth is one other matter. As soon as a gradual monster performer, it’s been bumpier in recent times. The inventory is up 9% over one yr and 22% over 5. With dividends included, that’s respectable, however hardly thrilling.
Why did I promote? On the time, I argued that Unilever’s “sprawling operations had led to a lack of focus”. It was making an attempt to sharpen up by concentrating on 30 ‘Power Brands’, however progress appeared patchy. I additionally questioned whether or not a lofty price-to-earnings (P/E) ratio of round 24 left a lot room for share worth progress, except gross sales and income accelerated meaningfully.
Belatedly, the shares have sprung into life, leaping 12.7% within the final month. They had been lifted by full-year outcomes on 12 February, Unilever’s first since spinning off its ice-cream division.
Underlying gross sales progress for 2025 got here in at 3.5%, in keeping with forecasts. Hardly eye-popping, though momentum picked up within the fourth quarter. Full-year revenue surged 66% to €9.47bn, however that’s flattered by a €3.79bn achieve from the ice-cream demerger. Revenue from persevering with operations rose a extra modest 4.6% to €5.68bn. A €1.5bn share buyback was welcome.
A barely decrease P/E
Unilever’s valuation appears rather less demanding at the moment, with the P/E dipping just under 20. The outlook doesn’t precisely blow me away although. Unilever expects 2026 gross sales progress on the backside finish of its 4% to six% goal vary, reflecting softer market situations. Inflation could also be easing, however the cost-of-living squeeze hasn’t vanished.
As a defensive inventory, Unilever has arguably carried out its job throughout uneven instances. It nonetheless owns a formidable portfolio of on a regular basis manufacturers and is pushing tougher on value financial savings, reducing £670m final yr whereas sharpening its concentrate on extra worthwhile rising markets.
Final week, analysts at Berenberg mentioned the group has accomplished its transformation into “a simpler, more agile, faster-growing and more profitable business”. They nonetheless downgraded the shares from Purchase to Maintain although.
I feel Unilever is price contemplating for buyers in search of regular revenue and progress. However personally, I can see extra thrilling alternatives on the FTSE 100, and can purpose for these as a substitute.
