The FTSE 100 index consists of the 100 largest public companies by market capitalisation listed on the London Stock Exchange.
As such, the index is home to some truly global companies. Think of industry titans such as BP, AstraZeneca, and HSBC.
Today, I’m taking a look at one FTSE 100 stock in particular that I’d buy in a heartbeat if I had some spare cash lying around.
A company with brands appreciated worldwide
When it comes to international companies, it doesn’t get much more global than Unilever (LSE:ULVR).
The group consists of 127,000 people across the world managing over 400 brand names in more than 190 countries. In fact, around 3.4bn people use Unilever products every day.
That might come as a surprise, especially since not everyone has heard of Unilever. However, I’m willing to bet that nearly everyone is familiar with at least one of their brands.
Among the labels belonging to the consumer goods conglomerate are household names like Dove, Ben & Jerry’s, Cif, Vaseline, and Wall’s.
Impressive sales growth
In the last week of April, Unilever reported first-quarter revenue of €14.8bn, reflecting underlying sales growth of 10.5%.
This is well ahead of market expectations and thus represents a great performance for the company.
That said, it’s worth noting that higher prices were the sole driver of growth. This helped offset a 0.2% drop in volumes.
Looking ahead, underlying sales growth for the year will likely be at the top end of the 3%-5% ongoing target range.
The risks posed by falling volumes
But it won’t be absolute plain sailing for Unilever.
First of all, the unstable macroeconomic conditions that have forced the group to increase prices are threatening to really take their toll on volumes. After all, we’ve already seen a 0.2% drop in the first quarter.
If adverse business conditions persist, I won’t be surprised if volumes fall further. My concern would then be that this may not be totally offset by more price hikes, which harm consumers anyway.
That said, after nine consecutive quarters of price hikes, volumes remain considerably more resilient than some had feared. In my view, that’s largely thanks to Unilever’s globally trusted brands.
After all, in a harsh economic environment, brand power is incredibly important.
Trusting in the appeal of high-quality brands
As a result, I’m pleased to see that protecting the quality of those brands seems to be Unilever’s main priority.
To illustrate, brand and marketing investment rose €0.5bn last year and is expected to rise again throughout 2023.
With the group’s strategy being to lock in long-term customers with well-known and trusted brands, I’m confident Unilever is well-positioned to navigate any future macroeconomic uncertainly.
For these reasons, I classify Unilever as a high-quality FTSE 100 stock that I’d buy in a heartbeat if only I had the cash to spare.
