Unilever shares go ex-dividend on 26 February – time to consider buying them?
It’s almost a year since I left Unilever (LSE: ULVR) from my Self-Invested Personal Pension, and I can’t say I missed it. I just noticed that its shares will go ex-dividend on Thursday (February 26). Any investor is considering FTSE 100 the stock may be tempted to buy before then, to protect the next payout. So is it worth buying today?
On 12 February, Unilever announced a quarterly dividend of 46.64 euro cents (40.52p) per share. Anyone who buys before the ex-dividend date will get that on 10 April. This is not the most impressive income stock in the FTSE 100. The current trailing yield is about 3.1%. However, management has an excellent track record of increasing shareholder payouts over time.
Unilever has increased shareholder payouts every year this millennium, barring the financial crisis in 2009 and freezing them in 2022 and 2023 when dividends hold 170.72 euro cents. It has since been set at 175.88 cents in 2024, then 182.48 cents in 2025. The yield is not great but the income seems strong. However, as always, there are no guarantees.
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FTSE 100 income growth stocks
The share price is another matter. If you’re an established monster player, it’s been the case in recent years. The stock is up 9% in one year and 22% over five. Since there are benefits included, that’s respectable, but not very exciting.
Why did I sell? At that time, I argued with Unilever “dispersed tasks lead to a lack of focus”. It is trying to hone in on 30 ‘Power Brands’, but progress has been slow. I also doubted that a high price-to-earnings (P/E) ratio of around 24 left much room for share price growth, unless sales and profits accelerated in a meaningful way.
Over time, shares have rallied, jumping 12.7% in the past month. Full-year results were released on 12 February, Unilever’s first since exiting its ice cream division.
Sales growth under 2025 reached 3.5%, in line with forecasts. It didn’t show with the eyes, although the pressure increased in the fourth quarter. Full-year profit rose 66% to €9.47bn, but that was offset by a €3.79bn profit from ice cream sales. Profit from continuing operations rose a modest 4.6% to €5.68bn. The €1.5bn share buyback is welcome.
Slightly lower IP/E
Unilever’s valuation is looking a bit tight today, as the P/E dips to just under 20. However, the view doesn’t bother me. Unilever expects 2026 sales growth at the lower end of its target range of 4% to 6%, reflecting softer market conditions. Inflation may be slowing, but the squeeze on the cost of living is far from over.
As a defensive stock, Unilever has undoubtedly done its job in choppy times. It still owns a formidable portfolio of everyday products and is pushing hard for cost savings, shedding £670m last year while sharpening its focus on more profitable emerging markets.
Last week, analysts at Berenberg said the group had completed the transition to becoming “the easiest, fastest, fastest growing and most profitable business”. They still downgrade the shares from Buy to Hold though.
I think Unilever is worth considering for income and growth investors. But personally, I see more interesting opportunities in the FTSE 100, and I will target those instead.
