4. Unilever PLC (NYSE:UL)
Dividend Yield as of December 28: 3.25%
Unilever PLC (NYSE:UL) ranks fourth on our list of the best FTSE dividend stocks. The London-based multinational consumer goods company offers a wide range of related products. The company has shelved its efforts to sell its €15 billion ice cream division to private equity firms and will now prioritize plans for an independent public listing of the unit. In March, the consumer goods giant revealed its intention to separate its ice cream business. It sought to attract interest from private equity buyers for the division, which features well-known brands like Ben & Jerry’s, Magnum, and Wall’s. The stock has surged by 18.5% in the past 12 months.
In the first half of 2024, Unilever PLC (NYSE:UL)’s sales on an underlying basis rose by 4.1%, supported by a third straight quarter of positive and improving volume growth. Pricing adjustments aligned with expectations, showing a gradual moderation. Enhanced gross margins allowed for increased investment in innovative initiatives, leading to a noticeable improvement in overall profitability. The company’s operating profit of €6.1 billion, grew by 17.1% from the same period last year.
Hotchkis & Wiley Funds highlighted Unilever PLC (NYSE:UL)’s strong performance in its Q3 2024 investor letter. Here is what the firm has to say:
“Unilever PLC (NYSE:UL) is one of the world’s leading suppliers of consumer goods in the food, home care, and personal care categories, maintaining #1 or #2 market share over 75% of its business. With a new CEO and the involvement of an activist investor (Trian), Unilever is focused on execution and consistency, expecting low to mid-single digit volume-driven top line growth over the medium term, profit growth ahead of sales growth due to operating leverage and mix, and consistent return of cash to shareholders. Additionally, the company has announced plans to separate the Ice Cream business (13% of 2023 sales), which is expected to be completed by the end of 2025 and increase organic sales growth to 4-6% annually. Over the last quarter, the stock price reached a five-year high, as the company has continued to execute the plans laid out above. Unilever has not yet released their official third quarter results but has reiterated their confidence in achieving 3-5% organic sales growth for the full year, with the majority of this growth being driven by volume.”
Unilever PLC (NYSE:UL) also reported a strong position in its cash segment. Its free cash flow for the period came in at €2.2 billion. The company ended the first half with €4.97 billion in cash and cash equivalents, compared with €4.1 billion at the end of December 2023. It currently offers an interim dividend of £0.3696 per share and has a dividend yield of 3.25%, as of December 28.
According to Insider Monkey’s database of Q3 2024, 22 hedge funds held stakes in Unilever PLC (NYSE:UL), up from 21 in the preceding quarter. These stakes are worth nearly $2 billion in total. Ken Fisher’s Fisher Asset Management was the company’s leading stakeholder in Q3.
