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As the Unilever share price continues to fall, I’m still buying the stock

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The Unilever (LSE: ULVR) share price has been a challenging investment to hold over the past 12 months. The stock is off 15%, excluding dividends, since the middle of February last year.

Unfortunately, declines in the shares have only accelerated over the past few weeks. Since the beginning of the year, the stock is off around 11%, excluding dividends paid to investors. 

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However, despite this performance, I’ve been adding to my position in the consumer goods giant. 

Mixed outlook

Investors seem to have been selling their shares in the company over the past year due to concerns about Unilever’s growth potential. The firm relied heavily on business-to-business trade before the pandemic. That meant when the world went into lockdown in the first half of last year sales suffered. 

Over the past year, management has been repositioning the company for the new normal. The strategy seems to have yielded results as management was able to reinstate the group’s long-term growth target earlier this year. It’s aiming for sales growth of 3-5% per annum in the long term. But this outlook has only had a limited impact on the Unilever share price. 

Of course, the corporation is by no means guaranteed to hit these targets. As we’ve seen over the past year, outside events can impact even the market’s largest and most defensive businesses. Other factors have also hurt the company’s growth. Labour disputes, rising costs and currency headwinds are all issues Unilever’s management has to deal with regularly. 

On the other hand, the company does have a diversified portfolio of products, supplying everything from Ben & Jerry’s ice cream to Brylcreem, Bovril and Cif. This level of diversification has helped the business weather the pandemic. It’s fared much better than many other FTSE 100 corporations as a result. 

The Unilever share price: a long-term investment

Unilever’s growth targets suggest the company won’t become the market’s fastest-growing enterprise anytime soon. Nevertheless, it does imply the business is aiming for slow and steady long-term growth from its portfolio of billion-dollar brands.

That’s why I like the group. It’s not going to shoot the lights out, but I think it’s more dependable than many other businesses, thanks to product diversification. 

What’s more, after recent declines, the Unilever share price currently supports a dividend yield of just under 4%. This distribution isn’t guaranteed forever. If the company’s earnings suddenly take a dive, for example, management may have to cut the payout to reduce cash burn.

However, Unilever seems to be committed to the dividend for the next year at least. That’s highly positive, in my view. 

So, overall, considering the company’s defence nature and attractive dividend yield, I’d buy the stock for my portfolio today. Still, this organisation may not be suitable for all investors, considering its modest growth targets and potential headwinds. 

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Rupert Hargreaves owns shares in Unilever. 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.