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Have £3k to invest? 3 FTSE 100 dividend stocks I’d buy and hold for 20 years

I’m convinced increasing urbanisation and rising wealth in developing markets will be one of the great structural growth trends for decades to come. Some FTSE 100 companies are better positioned than others to benefit from this long-term tailwind. With this in mind, I see Prudential  (LSE: PRU), Unilever  (LSE: ULVR) and Intertek  (LSE: ITRK) as blue-chip dividend stocks I’d be happy to buy and hold for 20 years.

Unlocking value

Insurance giant Prudential (prospective yield of 3.4%) is benefiting from rising demand for protection and long-term savings products in countries like Hong Kong, China, Singapore and India. In fact, its pan-Asian business contributed £2.1bn to the group’s total operating profit of £5.7bn in 2018, while the US contributed £1.9bn and the UK/Europe £1.6bn.

Furthermore, the company is preparing to demerge its UK/Europe business (M&G Prudential), probably later this year or early in 2020. On a sum-of-the-parts (SOTP) basis, City analysts value the group in a range between a bit above and a bit below £50bn. This compares with a current market capitalisation of around £42bn. I think the demerger could go a long way towards unlocking the SOTP value.

The M&G Prudential business is not unattractive in its own right. However, I’d see the demerger as an opportunity to sell the shares in the spin-out company and retain shares in Prudential for the long term.

Brands champion

Unilever (prospective yield of 3.4%) owns some of the world’s best known brands in personal and home care, and food and refreshment. No fewer than 12 of its brands have sales of more than €1bn a year, and on any given day, 2.5bn people around the world use its products.

In 2018, the group’s total global revenue was €51bn, with a whopping 58% of it generated in emerging markets. The proportion of revenue from these markets has been increasing, and the trend is set to continue, with ever more people having disposable income available to spend on branded products (higher price/higher social cachet), like those of Unilever.

Unilever is the type of business beloved by legendary US investor Warren Buffett. In fact, Buffett-backed Kraft Heinz made a 4,000p a share offer for the company in February 2017, which was rebuffed. Two years and 22% earnings growth later, Unilever’s shares are comfortably less than 10% higher than the price Kraft Heinz offered, making them good value at the current level, in my view.

Compelling opportunity

Intertek (prospective yield of 2.2%) has delivered the third highest dividend growth rate in the FTSE 100 since it joined the stock market in 2002. The company provides assurance, testing, inspection and certification services for a wide range of customers. It has a network of more than 1,000 laboratories and offices in over 100 countries.

In an ever more complex world, regulation, quality and safety are key growth drivers for Intertek. Industrialisation and urbanisation in developing economies make these regions particularly fertile ground for increasing demand for the services the company provides.

Despite a dip after its recent annual results, Intertek’s shares aren’t cheap at around 23 times forecast 2019 earnings. However, I believe the structural backdrop for the business is so strong, and the long-term growth opportunity so compelling that this currently sub-£8bn cap stock could be a top-performing blue-chip over the coming decades.

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G A Chester has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK has recommended Intertek and Prudential. 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.