Unilever: a FTSE 100 dividend share I'd buy and hold forever

I have long been a fan of household goods giant Unilever(LSE: ULVR) and I don't believe my admiration for this evergreen stock will ever fade.

Even during periods of tough trading in some of its key markets, the maker of Dove soap and Marmite spread can still be relied on to keep sales chugging skywards thanks to the enormous popularity of such labels. Even when shopping budgets are stretched, people can still find a way to spread their pennies that little bit further to accommodate Unilever's fare.

This point was gloriously illustrated on Thursday when the FTSE 100 business declared that underlying sales rose 3.4% during the three months to March, or 3.7% excluding the contribution of its soon-to-be-divested Spreads division (which is expected to be lopped off "in the middle of the year").

Still, cutting out the impact of Spreads, Unilever said that the sales uptick was prompted by a 3.6% rise in volumes and a 0.1% improvement in price.

Despite witnessing an environment of "continued price deflation in Europe and North America," underlying sales in these developed markets still rose 1.1% in the first quarter. And things were even better in the company's emerging markets where underlying sales grew 5.1% (thanks to volumes and prices jumping 4.3% and 0.8% respectively). Unilever sources 60% of total revenues from these bright developing regions.

A long-term lovely

Sales may have cooled from the previous quarter (excluding Spreads, underlying revenues rose 4.3% during October-December), but given the price pressures in its established markets, the solid revenues uptick in quarter one is still not to be sniffed at.

And the manufacturer is confident it can keep turnover moving at a sprightly pace. For the full year it is expecting underlying sales growth ranging between 3% and 5%.

Besides, Unilever's sprawling footprint in emerging regions makes me confident of solid and sustained sales growth as rising population levels and personal incomes keep driving demand for its top-tier goods. And this, combined with its resilience in Europe and North America, convinces me Unilever is a share you can buy today and lock away for years to come.

A brilliant 'all rounder'

In the nearer term, City analysts are expecting the firm to generate earnings growth of 6% this year and 10% in 2019 despite current deflationary troubles in its developed markets. The bottom line is being helped by the impact of its margin-boosting 'Connected 4 Growth' self-help programme, which is seeking to drive Unilever's underlying operating margin to 20% by 2020.

This splendid earnings visibility makes Unilever a great pick for dividend hunters as well. And with profits expected to continue their northwards charge, the full-year reward is expected to stomp to 135.4p in 2018 and 147p in 2019. Consequently, share pickers can enjoy chubby yields of 3.5% and 3.8% for these respective years.

A forward P/E ratio of 18.8 times may sail above the accepted value watermark of 15 times, but in my opinion, Unilever's sunny earnings and dividend outlook makes the stock worthy of this slight premium.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Unilever. 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 us better investors.

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