One blue-chip FTSE 100 share to buy now

Our writer chooses a FTSE 100 share to buy now for his portfolio that he likes for its proven business model that benefits from high customer demand.

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During times of market volatility, it can be reassuring to be invested in companies that have a certain predictability about their business. Sometimes, a business model honed over decades has daily customer demand that is likely to remain for years to come. Such companies can help a portfolio weather challenging periods in the stock market. One such blue-chip name is on my list of FTSE 100 shares to buy now for my portfolio.

Major multinational

With its portfolio spanning everything from soup brand Knorr to household bleach Domestos, Unilever (LSE: ULVR) products are found in cupboards of homes and businesses across the land. The company is based in the UK, but its sales are truly global in nature. Its products are available in over 190 countries. Most incredibly in my view, Unilever products are used by 2.5 billion people every day on average. That scale of business and frequency of usage help to explain how the company’s products make up an enormous business with strong, ongoing demand.

The company has spent decades building well-known premium brands that make its customers choose Unilever products over alternative such as supermarkets’ own products. That gives the company what is known as pricing power. This enables a company to raise its prices to a certain extent maintain its profit margins. That can be useful to offset cost rises in its supply chain.

Risks to the Unilever share price

Such pricing power is helpful right now as rampant cost inflation in everything from detergent ingredients to packaging materials threatens to eat into profits. Indeed, Unilever expects to be hit by over €2bn of cost inflation in the first half of the year alone.

But the pricing power of its portfolio has enabled management to proclaim confidently: “In 2022, we will manage a significant input cost inflation cycle.” That sort of confidence about the ability to manage risks as they arise is one of the attractions to me of holding a blue-chip share like Unilever in my portfolio.

Why this is a FTSE 100 share to buy now

Not everyone shares my enthusiasm about the company though.  The Unilever share price has fallen 5% over the past year, even as the wider FTSE 100 has grown 8%.

That reflects concern about risks including inflation. But there has also been mounting investor dissatisfaction about Unilever’s management strategy. That became clear last month. It was announced that the company had bid unsuccessfully for the consumer healthcare business of rival GlaxoSmithKline.

The good thing about a business with several billion daily product users is that it benefits from long-term strength in customer demand. That can support future revenues. So while management can come and go, along with changes in strategy, the underlying business is built to be resilient. That is how I see Unilever, which raised its annual dividend 3% this month. After its share price has drifted down, I see value in a such a long-established, solid business. That is why I regard it as a share to buy today for my portfolio.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Christopher Ruane owns shares in Unilever. The Motley Fool UK has recommended GlaxoSmithKline and 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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