It’s virtually a 12 months 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 (*26*) 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 buying at present?
On 12 February, Unilever declared a quarterly interim dividend of 46.64 euro cents (40.52p) per share. Anybody buying earlier than the (*26*) date will get that on 10 April. This isn’t essentially the most dazzling earnings inventory on the FTSE 100. The present trailing yield is round 3.1%. Nonetheless, administration has a reasonably first rate monitor file 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 up to 175.88 cents in 2024, then 182.48 cents in 2025. The yield isn’t large however the earnings stream appears resilient. As ever, although, there aren’t any ensures.
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FTSE 100 earnings development inventory
The share worth is one other matter. As soon as a gentle monster performer, it’s been bumpier lately. The inventory is up 9% over one 12 months 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 scarcity of focus”. It was making an attempt to sharpen up by concentrating on 30 ‘Energy Manufacturers’, however progress seemed 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 development, except gross sales and income accelerated meaningfully.
Belatedly, the shares have sprung into life, leaping 12.7% within the final month. They have been lifted by full-year outcomes on 12 February, Unilever’s first since spinning off its ice-cream division.
Underlying gross sales development for 2025 got here in at 3.5%, in step 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 acquire 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 seems to be rather less demanding at present, with the P/E dipping slightly below 20. The outlook doesn’t precisely blow me away although. Unilever expects 2026 gross sales development on the backside finish of its 4% to 6% goal vary, reflecting softer market circumstances. Inflation could also be easing, however the cost-of-living squeeze hasn’t vanished.
As a defensive inventory, Unilever has arguably executed its job throughout uneven occasions. It nonetheless owns a formidable portfolio of on a regular basis manufacturers and is pushing more durable on price financial savings, slicing £670m final 12 months whereas sharpening its focus on extra worthwhile rising markets.
Final week, analysts at Berenberg mentioned the group has accomplished its transformation into “a less complicated, extra agile, faster-growing and extra worthwhile enterprise”. They nonetheless downgraded the shares from Purchase to Maintain although.
I feel Unilever is price contemplating for traders looking for regular earnings and development. However personally, I can see extra thrilling alternatives on the FTSE 100, and can goal for these as an alternative.
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