Anyone who buys Unilever (LSE:ULVR) shares before the stock market opens on Thursday (6 November) gets a 39p per share dividend next month. Anyone who buys it after, doesn’t.
That makes it seem simple — anyone thinking about buying Unilever shares should do it before Thursday, right? If only investing were so straightforward…
The stock market
By itself, the stock going ex-dividend on Thursday is a non-issue in terms of when to buy. Investors can expect the share price to adjust accordingly on the day.
Other things being equal, Unilever shares will be worth 39p less than they were the day before. And this is something that’s likely to be reflected in the share price.
The stock market isn’t 100% efficient. But investors should assume it’s capable of processing precise publicly available information announced over a month ago.
Even if Unilever shares go up on Thursday, this will still reflect the fact the firm is committed to sending out 39p per share. There are, however, other reasons to consider buying.
Resilience
There’s plenty to like about Unilever. It makes products people need and it’s unlikely to find itself disrupted by artificial intelligence (AI).
GPT-5 lets users build programmes that help them learn languages and create their own AI agents. But they can’t eat it and they can’t use it to clean their houses.
So Unilever is unlikely to face much competition from AI competitors. And the markets it sells into are likely to grow over time as the global population increases.
The firm’s biggest challenge is that – unlike software businesses – switching costs for customers are very low. But Unilever has some unique advantages for managing this risk.
Scale
One of the best ways for a company to differentiate itself is by operating at scale. This can turn what would otherwise be an unremarkable business into an outstanding one.
In the case of Unilever, its scale gives it an advantage when it comes to negotiating with suppliers and retailers. And this sets it apart in an industry with low switching costs.
In other words, barriers to entry for competitors are low – it isn’t that hard to start a consumer products business. But it is difficult to match the advantages Unilever’s scale provides.
That’s why the company has been such a consistent source of dividends over time. And while it remains intact, I think it’s well worth considering for passive income investors.
Dividend investing
There are good reasons to think about buying Unilever shares right now. But none of those is about the stock going ex-dividend later this week.
Investors who buy from Thursday onwards won’t get the December dividend. That by itself, however, isn’t a reason to rush out and buy in the next couple of days.
The company will be worth 39p per share less when the stock goes ex-dividend. And since this is well-known public information, investors should expect the market to factor this in.
