Today, I’m looking at three FTSE 100 dividend stocks that I hold within my own personal dividend portfolio and plan to hold for a very long time, possibly even forever. All three have excellent long-term track records of generating shareholder wealth.
Unilever (LSE: ULVR) which owns a portfolio of over 400 household brands such as Dove, Persil and Domestos is the perfect ‘core holding’ type of stock, in my view. With such a strong portfolio of popular products, the company is able to generate consistent revenues and earnings year after year, and its significant exposure to the world’s emerging markets also provides a compelling long-term growth story.
Unilever has made news headlines recently, as the company was planning to move its headquarters to the Netherlands to simplify its corporate structure. This would have seen the stock drop out of the FTSE 100 Index. However, in good news for UK investors, the firm announced yesterday that it has cancelled the move and that it will be remaining here in the UK.
ULVR shares rarely come cheap as the stock is highly sought after by fund managers and private investors alike, which is no surprise when you consider that the company has compounded its dividends by 8% per year since 1952. It’s a stock to buy on the dips, in my opinion.
Diageo (LSE: DGE), which owns an outstanding portfolio of alcoholic beverage brands, such as Johnnie Walker, Smirnoff and Tanqueray is another classic core holding stock that I have no intention selling. Whether the global economy is booming or struggling, you can be sure people will be drinking Diageo’s products and therefore I believe it’s the kind of stock you can buy and forget about. Like Unilever, Diageo also has strong exposure to the world’s emerging markets, meaning that it’s set to benefit as the wealth of consumers in these regions increases over the coming decades.
One thing I love about Diageo is its dividend growth track record. The company may not have the highest yield in the FTSE 100, at 2.6% (estimated for FY2019), but when you consider that it has increased its dividend every year for 20 consecutive years now (by over 500% in total) it becomes apparent the group is a true dividend superstar. It’s another stock to buy on the dips.
Royal Dutch Shell
Lastly, the largest stock in the FTSE 100 – Royal Dutch Shell (LSE: RDSB) – is another stock I have no intention of selling in the near future. While the world is slowly becoming more ‘green’ and adopting alternative energy sources, a recent trip to the US reminded me just how dependent the world is on oil for transportation. I can’t see that changing significantly any time soon, even if electric cars are becoming more popular.
Two things that stand out to me with Shell are its high dividend yield and its long-term dividend track record. With the company expected to pay a dividend of 188 cents per share this year, the prospective yield is a high 5.4%. That yield is highly appealing in today’s low-interest-rate environment. Furthermore, the company has not cut its dividend since World War II. It even managed to maintain it when oil prices plummeted in early 2016, which is the sign of a well-managed company. With that kind of track record, I’m happy to hold for the long term.
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Edward Sheldon owns shares in Unilever, Diageo and Royal Dutch Shell. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK has recommended Diageo. 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.