The Motley Fool

The FTSE 100’s biggest company is crushing the coronavirus. I’d buy its shares today!

Image source: Getty Images

As I wrote towards the end of May, the old FTSE 100 is dead. Four months on from the steepest crash in its history and the UK’s main market index keeps evolving.

The FTSE 100’s new king

Until recently, the surging share price of UK pharma giant AstraZeneca (LSE: AZN) had made it the FTSE 100’s new king. The shares are up a quarter (25.4%) over the past 12 months, driven by enthusiasm about an exciting drugs pipeline. The firm is also a leading candidate to develop a Covid-19 vaccine, briefly driving its share price above £100.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

The FTSE 100’s new new king

AstraZeneca’s shares have dropped back about 15% from their all-time high and currently trade at around £86.56. This values the UK’s leading drugmaker at a tidy £113.1bn.

However, thanks to a recent share surge elsewhere, the FTSE 100 has yet another new king. Currently, the FTSE 100’s biggest business by market value is Anglo-Dutch household name Unilever (LSE: ULVR).

As I write, Unilever’s share price hovers around £47.14, valuing this global leader at £122bn – or £8.9bn more than AstraZeneca.

Unilever is built on enormous scale

Here’s a single number to blow you away. Around 2.5bn people – or one in three of the world population – use Unilever products. To me, that’s simply mind-blowing.

Unilever has had a long time to grow. Its origins date back to 1871, when it was built on making butter and margarine. It then moved into manufacturing soap, detergents, and a whole host of other household products.

Today, Unilever has over 400 household brands in its cupboard – far too many to list. In the UK, our favourites include Domestos (cleanser), Dove (soap), Hellmann’s (mayo), Knorr (soup), Lipton (tea), Lynx (deodorant), Magnum (ice cream), and Surf (laundry detergent) – and this list goes on and on.

A FTSE 100 colossus

While other businesses have crashed due to the coronavirus, Unilever’s market leadership in cleansing and hygiene products has proved vital. Last week, the FTSE 100’s #1 unveiled better-than-expected quarterly sales, down only 0.3% in the deepest recession in British history. This caused a one-day surge of nearly 8% in its share price.

At £47.14, Unilever shares are down just 3.8% over the past 12 months, while the wider FTSE 100 has crashed by a fifth. Unilever’s 52-week high of £53.33 was set on 4 September 2019, so it’s slipped 11.6% since. Then again, Unilever shares were an absolute bargain on 16 March, when they slumped to just £35.83. That was a golden opportunity to buy into a world-class business at a low price.

Unilever combines stability, income, and growth

Today, Unilever shares are not so cheap as in March, trading on a price-to-earnings ratio of 22.9 and a dividend yield of 3.1%. Then again, the king of the FTSE 100 keeps churning out quarterly cash dividends, unlike dozens of big firms that have cut, suspended, or cancelled payouts.

Buy Unilever shares before 6 August and you’ll be entitled to the next quarterly dividend of 36.98p, paid on 9 September. Then sit back and watch future dividends come rolling in forever. That’s why I’d buy and hold this FTSE 100 star’s shares today.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended 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.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.