Is Unilever plc the FTSE 100's best stock of all time?

Since 1988, the FTSE 100 has quadrupled in value, and that's on top of providing dividend yields which currently average around 3% per year.

But that's nothing compared to Unilever(LSE: ULVR), up by 1,300% over the same period - and with dividends better than 3%.

There's a 16% rise in earnings per share forecast for the current year, and first-half results released Thursday suggest the company is firmly on course.

Underlying sales grew by 3%, with underlying earnings per share up 14%, leading chief executive Paul Polman to enthuse: "Our first half results show continued growth well ahead of our markets and a substantial step-up in profitability despite the persisting volatile global trading environment."

Unilever's change programme, labelled 'Connected 4 Growth' is apparently doing better than planned, and the company is now expecting "an improvement in underlying operating margin this year of at least 100 basis points and strong cash flow."

Overvalued?

I could be talking about a hot growth stock here, rather than a purveyor of such plodding brand necessities as Dove, Domestos, Knorr and Lipton, and a whole host of other well-known household names.

But that's part of its strength. Financial crash? People will still need to wash. Housing collapse? Tea will still be taken.

Earlier this year, Unilever rejected a bid from Kraft Heinz at 4,000p per share, and that was a good move - the shares currently trade at 4,365p. That gives us a forward P/E in excess of 20, which many think is overvalued. In fact, in the past I've thought so, too. But when I look back on my former self and how well Unilever has done, I think "plonker".

In my view, Unilever is possibly the best all-round, long-term share in existence.

Another Unilever?

When I look at Diageo(LSE: DGE), I can't help thinking that it is to booze what Unilever is to consumer goods. Diageo shares haven't climbed quite as far as Unilever's - just a relatively modest 1,100%! And recent dividend yields are slightly lower at just under 3%. But that's another cracking performance.

With spirits brands including Smirnoff, Johnnie Walker, Gordon's, Captain Morgan, Seagram's and many more in its arsenal, Diageo was the world's largest distiller until overtaken by China's Kweichow Moutai earlier this year. It also owns many other alcoholic beverage brands, including Guinness and Baileys, and it owns 34% of LVMH's Moët Hennessy.

What we're looking at is very similar defensive safety to Unilever, in a product range that is very resilient against all sorts of economic and investment shocks, and with a similar global reach. In fact, North America accounts for 37% of total revenue, and it's a growing market.

Diageo also provides steady earnings growth and at 2,300p, its shares command a premium P/E rating of around 20.

Not overvalued either

Again that looks high by usual metrics, but the falling pound is giving the firm a boost (with the majority of its revenue coming from overseas) and City analysts are predicting earnings per share gains of 18% this year and 8% next.

Once more I see a stock that should provide steady and safe returns for decades to come, with very little chance of losing out in its key products and key markets. And I see the premium rating on the shares as justified.

If you just bought these two shares, I reckon you'd probably do better than a lot of investing professionals.

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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK has recommended Diageo. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes

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