A ridiculous share of the FTSE 100 that I plan to hold for the next decade (or two)

Calling a FTSE 100 Mindless shopping is an honor. I would not extend it to many companies. However I think I can use that phrase to describe the consumer goods giant Unilever (LSE: ULVR). It is one of the things I hold in my portfolio.

This does not mean that I think it will always pass. In fact, it has been struggling in recent years. Stock markets go through cycles, and so do individual companies. Yet Unilever has great resilience.

It has been in business for over a century. Today, it sells its products in 190 countries, with 3.4 billion people using them every day. Most people will see many types of food, hygiene and beauty, including This is Ben & Jerry's, Houses, A dove, This is Hellmann's place, Sunsilk many more.

I hope to hold Unilever forever

Unilever has a large presence in emerging markets, which generate 58% of its revenue, giving it access to a growing consumer base.

However, success brings with it problems. Managers have been trying to simplify their overly complex operations. Sprawling is a commonly used term.

It also faces a battle to attract younger talent who may not be attracted to whizzier sectors such as technology and finance. Sustainability is another challenge, given the amount of plastic it requires. Former CEO Alan Jope's efforts to find a new way of making brands stand for something “more important than making your hair shiny, your skin soft, your clothes white or your food tasty” and it didn't connect.

The inflationary shock not only made consumers feel poor, it also raised the cost of raw materials, squeezing margins on both sides.

So there's a bit of brain power to be used here. But like I said, there will always be good times and bad times. New CEO Hein Schumacher has enjoyed a strong start, but he needs to push further to get Unilever flying again.

It is still in the recovery phase

Things are getting better though. Unilever's share price has increased by 19.27% ​​compared to last year.

Investors will have more benefits. The trailing yield of 3.12% may be below the FTSE 100 average of 3.5%. Dividend growth has slowed since the pandemic but the board recently increased its quarterly payout by 3%, as this chart shows. It also launched a major share buyback of €1.5bn.

Chart with TradingView

I believe that from a long-term perspective, this £118bn company makes no sense to buy and hold. It has amazing defensive features as it sells the kind of products that people buy in good and bad times.

The board has been focusing on branding across its 30 Power Brands with positive results. They posted sales growth of 5.7% in the six months to 30 June. Operating ratios are forecast to jump from 16.4% to 18% this year. Unilever's return on rent is 67%.

With interest rates falling, and (fortunately) the US economy engineering a mild recession, I expect Unilever's recovery to continue, albeit at a slower pace. I have a very large supply, so I will not buy more. I'll let my stocks do their thing for ten years, and maybe two.