Food on the block

Like the broader stock market, Unilever’s shares slumped after the Iran war began. With it came fears of higher costs and weaker consumer spending power as oil prices surged. Inflation and its impact on global interest rates and economic growth could be catastrophic.

But that’s not the whole story behind the FTSE firm’s decline. Investors also reacted badly to news on 31 March that Unilever was selling its Foods division to McCormick & Company for $44.8bn.

The move makes sense to me, allowing the company to focus better on its Home Care and Personal Care divisions. This carries advantages like the opportunity to lean into faster-growth categories, products with better profit margins, and regions with booming population and wealth levels.

It follows the divestment of the firm’s ice cream division last year. So what’s the problem on this occasion? Put simply, the Food unit is more valuable than Unilever’s remaining operations, prompting the re-rating of its share price. Investors were also unimpressed by the structure of the deal — just $15.7bn of the deal in cash, with the remainder settled in shares in the spun-off business.

But I view the news as a net positive for Unilever, provided it goes through. So are its shares a buy?

Downgrades to come?

Let’s first look at this in the context of the firm’s most recent financial statement. In 2025, Unilever recorded underlying sales growth of 3.5%, below its multi-year target of 4% to 6%. And it’s warned that the top line could continue to underwhelm — this year, it expects growth to “be at the bottom end” of the range due to “slower market conditions“.

The trouble is these predictions were made before the Iran war kicked off. So there’s a good chance that sales will miss even this modest target. It’s also possible margin forecasts will be downgraded as cost pressures increase. Unilever predicted “a modest improvement in underlying operating margin” from the 20% last year.

In this landscape, Unilever’s share price could fall further over the coming months. And particularly if the recent Middle East ceasefire crumbles. But for long-term investors, I think the consumer goods giant could be worth a close look.

A FTSE 100 bargain?

Make no mistake: Unilever is a high-quality business, with ‘power brands’ like Dove soap and Persil detergent driving growth. It also has strong exposure to emerging markets, where consumer spending is rising especially rapidly.

What’s more, its shares trade at a slight discount to their historical average. The forward price-to-earnings (P/E) ratio is 16.5, below the 10-year average of 17-18. This doesn’t make Unilever shares a white-hot bargain, but it provides an added little sweetener for investors. Taken altogether, I think this is a top FTSE 100 share to consider following recent price weakness.

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Since then, large-cap stocks have partially bounced back. But is this just the calm before the real storm? And if so, how can investors protect their portfolios today?

Why the UK might be in serious trouble

With around 15%-20% of global oil & gas supply now disrupted due to the war, energy prices are surging, and Britons are already feeling the pinch at the petrol pump.

But it’s not just higher oil & gas prices that people need to worry about. Around one third of the globally traded fertiliser supply has also been severely impacted just as British farmers enter the biggest fertiliser application period of the year for winter cereals. And with April also the main planting season for mainline vegetable crops, the timing of this supply chain disruption is less than ideal.

Put simply, food and energy price inflation looks like it’s about to make a comeback. And with the economy already quite fragile, the risk of a recession’s rising.

Don’t panic

The economy’s in a tight spot. But the situation, while challenging, doesn’t guarantee a stock market crash. In fact, compared to most global indices, the FTSE 100’s actually far more insulated to the current headwinds. After all, most of its constituents operate in recession-resistant industries including energy, mining, defence, and healthcare.

At the same time, a large chunk of their earnings actually stems from international markets. As such, if the worst-case scenario does occur and the UK economy takes a tumble, many large-cap companies could comfortably absorb this impact.

Therefore, while the risk of a full-blown stock market crash is real, a correction seems far more likely.

Still, corrections can be painful. So what can investors do today to ensure their portfolios are better protected?

What the experts are doing

Beyond general diversification and ensuring portfolios are sticking within their risk-tolerance limits, institutional analysts are hunting for buying opportunities within all the ongoing market chaos. And here in the UK, several names are emerging as popular defensive favourites, including Unilever (LSE:ULVR).

The consumer brands powerhouse has been busy transforming and optimising its product portfolio to bolster profit margins over the medium term.

While the escalation of the UK cost-of-living crisis does create some headwinds, management’s being far more disciplined in its spending, including a recent hiring freeze and ongoing efforts to unlock significant operational savings.

As such, the analyst team at JP Morgan has just reiterated its Buy recommendation with a 5,700p share price target, implying a 36% potential upside from current levels even with all the external macroeconomic challenges.

However, while that certainly sounds promising, success isn’t guaranteed. Executing a large-scale transformation in the middle of an economic wobble is a challenging task. And with management pulling back on spending, it could make hitting earlier growth targets more difficult.

Nevertheless, for investors seeking shelter from wider market volatility, Unilever shares, while not risk-free, could indeed be worth considering in the current climate. And it isn’t the only defensive stock on my radar right now.

The post Is the FTSE 100 heading for an epic stock market crash? appeared first on The Motley Fool UK.

The war in Iran continues, but lately investors have decided to look on the bright side. They believed Donald Trump when he said peace talks are happening, and ignored Iran when it said the opposite. They’ve absorbed so many shocks lately, they’ve decided to keep calm and carry on. Which is always a pretty solid strategy.

FTSE 100 volatility brings opportunity

Since 2020, investors have seen off the pandemic, Russian invasion of Ukraine, cost-of-living crisis and US tariffs. Markets fell every time, but quickly bounced back. Nobody wants to get locked out of the post-Iran recovery, when it comes.

Buying shares either side of this year’s Stocks and Shares ISA contribution deadline on April 5 nevertheless takes nerve. There’s a chance markets have further to fall. At The Motley Fool, we’ve learned that nobody can second guess where the stock market is going. Shares may crash next week, they may recover at speed. Nobody knows.

The best option is to feed in money whenever investors have cash to hand, then hold for the long term, to give the shares and reinvested dividends time to compound and grow. Today’s volatility is a good opportunity to buy stocks at a reduced price, and with a higher starting yield.

The Unilever share price has plunged

One stock worth considering is consumer group Unilever (LSE: ULVR). For years, it was seen as a bright, shining FTSE 100 blue-chip, but lately its star has dimmed. It’s been hit by the cost-of-living crisis, the attentions of activist investor Nelson Peltz, and a sense that the business just got too big and sprawling to manage.

On 12 February, the board said it expected 2026 sales growth to be at the bottom end of its underlying range of 4%–6%, due to slower market conditions. As the Middle East explodes and oil price climbs, those conditions must look a lot worse today.

The market has also responded poorly to news that Unilever will sell most of its food business, including Marmite, to US-based McCormick. This follows the sale of its ice cream division last year. Personally, I think this could be positive, as it allows Unilever to focus on its personal care and beauty brands, which have bigger margins.

Also, I’ve been worried about its food brands for years, thinking the likes of Hellmann’s, Knor, Bovril, Pot Noodle, Colman’s and Horlicks look vulnerable to changing consumer trends. Weight loss drugs have sharpened that concern. The market begs to differ though. Unilever shares have fallen 21.7% in the last month, and now trades at levels seen almost a decade ago.

The plus side is that they look much better value, with a price-to-earnings ratio of 15.5. I wouldn’t say it’s cheap, but this is well below its historic P/E of around 24. The dividend yield has crept up to 4.4%. I think it’s worth considering, and can see plenty more great value FTSE 100 stocks to consider. Unilever is far from the only company trading near a 10-year low today.

The post Is this a once-in-decade chance to buy top UK stocks on the cheap? appeared first on The Motley Fool UK.

The stock was down after news of plans to separate its food business. But a complicated deal might have created an interesting opportunity.

What’s happened?

Unilever has been on a restructuring mission. It spun out its ice cream division at the end of 2025 and is now divesting its other food businesses.

On Tuesday (31 March) Unilever announced a deal to sell its food brands to McCormick. The implied valuation is $44.8bn. 

This values the food business at an enterprise-value-to-EBITDA (EV/EBITDA) multiple of 13.8. But that’s not the interesting bit.

The stock fell 7% on the news. And the decline implies an EV/EBITDA multiple of 12.7% for the remaining parts of the company. 

That means the more attractive divisions are trading at a lower multiple than the ones it wanted to lose. That’s the bit worth noting.

The reason is the nature of the deal. It’s more complicated than investors might have been hoping for and that’s created some uncertainty.

The deal

Officially, Unilever is selling its food businesses to McCormick. But it’s not as straightforward as the FTSE 100 firm getting cash for its businesses.

Of the $44.8bn, only $15.7bn is cash. The rest of it is in stock – in a company featuring the businesses Unilever was trying to get rid of.

The company itself is going to own almost 10% of the new enterprise when the deal closes next year. And its existing shareholders will own 55%.

There’s also a potential antitrust issue. Merging with McCormick creates a firm so big that it might have implications for competition.

That creates uncertainty over what it will take to get the deal done. All of this makes it less attractive than a straightforward cash sale.

Complications

These might look like minor issues, but they’re actually quite significant. They affect both Unilever and its shareholders. 

The company won’t be able to sell its stake in the combined entity for at least a year. So it’s going to be stuck with that for some time.

Given the firm’s aim of moving away from these businesses. It’s a step in the right direction, but it’s not what investors might have hoped for.

Shareholders will be able to sell their shares immediately. But if they all try to do this at the same time, the price might well crash. 

That means their ability to realise the $44.8bn headline figure depends on the stock market. And it’s therefore far from guaranteed.

Opportunity?

Unilever’s strategy of focusing on its most promising divisions has been a good one. But the latest deal is more complicated than shareholders might like.

The stock market’s reaction to the deal is understandable. Despite this, it might have created an unusual opportunity for value investors to consider.

Unilever shares don’t often trade at low multiples. And the current situation isn’t one that’s likely to show up again. 

As a result, I think the stock is well worth considering. There’s uncertainty, but that can often be what creates the best investment opportunities.

The post Value investors: Unilever shares are down 7% in a day! appeared first on The Motley Fool UK.

What might that mean for the Unilever share price down the road?

There is a strategic logic here

Personally I will be sad to see Unilever get rid of its food business.

After all, the firm itself is a combination of the Lever brothers’ detergent business, associated with the iconic Port Sunlight model village on the Wirral, and Dutch margarine maker Unie close to a century ago.

Unilever got out of the margarine business in 2017 but its food division remains a nod to its corporate heritage.

It is also a large part of the company today. Last year it delivered €13bn of revenue, just over a quarter of the FTSE 100 firm’s total revenue.

But it had the slowest revenue growth of Unilever’s four operating divisions.

Other large consumer goods companies have streamlined their portfolios to focus on higher growth potential businesses in recent years.

Unilever took a similar move last year when it spun off the Magnum Ice Cream Company. There is a logic to further reducing its footprint in the food business.

Could a transaction create value for shareholders?

That logic is debatable, though.

Going back to the original merger between Unie and Lever Brothers, the idea was that scale could help. For example, it would give the combined business more heft when negotiating with retailers.

I think that remains true today, even though Unilever would still be a substantially sized business even if it gets out of foods altogether.

Rivals have exited some businesses to focus on what is often described as the higher margin beauty business. That logic may seem to apply to Unilever, owning as it does brands like Dove.

Personally, though, I am not convinced by that. Last year, the food business and personal care business had the same underlying operating margin. Both the beauty and wellbeing and personal care businesses had markedly lower underlying operating margins.

The dust is still settling

Given its strong brand stable, I could see Unilever attracting potentially attracting other, unsolicited, bids for its food division.

The company’s smaller size after the transaction may make it more vulnerable to a takeover bid itself, I reckon.

The $16bn it is set to get in cash from the transaction will help its balance sheet and could fund strategic acquisitions.

Unilever will also own almost 10% of the new firm, so it will be in the foods business as a shareholder. Unilever shareholders will get the majority of the new firm.

That deal structure means the transaction may not affect the Unilever share price much in the short term. It seems to me that Unilever is getting a fair price.

At 19 times earnings, the company’s share price is not particularly attractive to me, so I have no plans to invest.

The post Could getting out of the food business help the Unilever share price? appeared first on The Motley Fool UK.

Geopolitical tensions are the highest they’ve been in some time. That’s bad for the economy, but it might be good for investors.

Crisis? What crisis?

Covid-19 brought huge amounts of uncertainty and share prices crashed as a result. But this meant dividend yields shot up.

Opportunistic investors were able to take advantage of the uncertainty. And returns for those who bought dividend shares then have been terrific.

The situation today isn’t quite the same – conflict in Iran isn’t the same as a global pandemic. But the overall uncertainty level is extremely high.

With the US focused on the Middle East, some commentators are concerned that things might escalate elsewhere. This includes Taiwan and Eastern Europe.

That might make the situation the most uncertain since the pandemic. And that doesn’t sound like a good time to consider buying stocks. 

The stock market, however, is forward-looking. As a result, a number of stocks already look cheap and dividend yields have been rising. 

Where to look?

The likes of BP and Shell are obvious potential candidates at a time like this. Both stocks look cheap with oil prices above $95. 

I doubt, however, that this is going to remain the case. The US sees higher oil prices as a short-term necessity for long-term political stability. 

Whether or not that comes to pass is another question. But I’m doubtful about how long oil prices can remain at these levels. 

I think investors need to look past the next few weeks and months. Instead, there’s a chance to focus on companies that can do well for years.

One example is Unilever (LSE:ULVR). The stock is down 14% in the last month and the dividend yield has hit 3.75% as a result. 

Opportunities

In recent years, the chance to buy Unilever shares with that kind of dividend yield hasn’t come around often. So it’s worth paying attention when it does. 

Investors briefly had the chance a couple of years ago. But the business is arguably in a much stronger position than it was back then. 

One thing that hasn’t changed is the company’s scale. This gives it a big advantage when it comes to distribution and this is still firmly intact.

The firm’s brand portfolio, however, is much stronger than it was. Unilever has divested some of its weaker lines to focus on its more valuable ones.

That’s resulted in improved sales growth metrics in recent years. So I think the opportunity might be even better than it was during Covid-19.

Long-term thinking

Investors who can look past short-term challenges can do really well in the stock market. And I think that’s the case with dividend shares right now.

The risk for Unilever remains the prospect of customers trading down to cheaper alternatives. And that’s especially true in an inflationary environment. 

The company, though, has some key long-term advantages that put it in a good position to deal with this. These include its brands and its scale.

This is why the firm has such a good record of returning cash to shareholders. And I think the chance to buy it with an unusually high yield is worth taking seriously.

The post Is this the best time to buy dividend shares since Covid-19? appeared first on The Motley Fool UK.

The company in question is consumer goods giant Unilever (LSE: ULVR). For years, it was viewed as a top portfolio building block, offering both steady growth and rising income. The shares delivered, and so did the dividend.

Unilever looked reassuringly expensive. The price-to-earnings (P/E) ratio hovered around 24, while the yield sat at a modest 2%–3%. That felt acceptable given its track record of regular increases. And then it went wrong.

A decade of FTSE 100 drift

Some date its troubles to 2017, when Kraft Heinz made an unsolicited £115bn bid. It was swiftly rejected, but exposed weaknesses over Unilever’s strategy, structure and direction. Its vast portfolio of brands, which ranged from Hellmann’s to Vaseline and Dove, seemed to lack focus. Moves to define a broader social mission for its products drew a mixed response.

Boardroom tensions, pressure from activist investors and a long-running debate about whether the group should be broken up killed the vibe. Hedge fund investor Nelson Peltz joined the board in 2022 and pushed for sharper execution and disposals. Progress has been patchy.

The pandemic disrupted operations, then the cost-of-living crisis squeezed consumers. The shares are down 10% over 12 months and up a meagre 3% over five years. At today’s 4,594p, they’re trading at levels seen seven or eight years ago.

New chief executive Fernando Fernández promised a reset, lifting the mood. Spinning off the ice cream arm into The Magnum Ice Cream Company looked sensible, reducing seasonality and slashing refrigeration bills.

Share price recovery remains on ice

Full-year results on 5 February were patchy. Underlying operating profit slipped 1.1% to €10.1bn. Net profit jumped to €9.47bn from €5.7bn though, helped by disposals. The €1.5bn share buyback was welcomed. But the board warned that 2026 sales growth will be at the lower end of its 4% to 6% range, and the shares fell.

Kraft Heinz appears to have revived its interest, exploring a targeted tie-up between the two firms’ food divisions. Unilever is also examining other options. A deal could simplify the group and allow it to focus on faster-growing beauty and personal care lines.

On the other hand, its food brands do generate reliable cash. Finding a buyer at the right price may also prove tricky given current market turmoil.

Valuation and uncertainty

If oil and gas prices surge that will drive up transport and production costs, while squeezing consumers even further. The Unilever share price has fallen 14.5% in the last month, roughly double the FTSE 100’s decline.

Despite its troubles, this is still a £100bn company. The P/E now stands at a more modest 17.2, althought it’s still not cheap. The yield has edged up to 3.75%. That looks more appealing, but there’s massive uncertainty here. I certainly wouldn’t use the phrase no-brainer buy today. Investors might consider Unilever as a long-term recovery play, but they may find a cheaper entry point if today’s volatility continues.

The post Are we staring at a once-in-a-decade chance to buy this beaten-down UK growth stock? appeared first on The Motley Fool UK.

But what happens if there’s a stock market crash? Are there ways to shelter a SIPP from a major downturn?

Building a rock-solid portfolio

The answer to this question is yes. But it requires a shift from a growth-oriented mindset to one focused on risk management and capital preservation.

One suggestion is to build a balanced portfolio with a cautious asset allocation. This would mean a range of different asset classes, preferably offering plenty of exposure to those that have a low correlation to stocks (meaning that they don’t fall when stocks do).

Shares aside, the portfolio could include:

• Bonds (either individual securities or funds), which are lower-risk-but-lower-return investments.
• Money market funds, which are designed to offer attractive levels of yield (interest) with minimal risk.
• Cash, which provides an investor with options (like the ability to capitalise on stock market opportunities when they emerge).
• Gold (via ETFs), a classic ‘safe-haven’ asset.

By doing this, investors could minimise the impact of a substantial fall in the stock market.

Buying resilient stocks

Another strategy is to focus on ‘quality’ at stock level. By this, I mean investing in established blue-chip companies with rock-solid balance sheets and stable earnings.

These types of stocks tend to hold up better in a crash. Typically, they fall far less than, say, more speculative penny stocks.

Allocating some capital to ‘defensive’ stocks can also pay off. Here, I’m talking about those in sectors such as Consumer Staples, Healthcare, and Utilities.

One individual name that could be worth considering as a defensive play is Unilever (LSE: ULVR). The owner of a ton of well-known household brands (eg Dove, Simple, Domestos, Persil, Cif, Knorr, Hellmann’s), it’s the largest consumer goods company on the London Stock Exchange.

The beauty of this company is that it’s relatively immune to economic cycles. In an economic downturn, people will still buy essentials like deodorant, clothes detergent, and toilet cleaner, meaning that Unilever’s revenues are usually pretty stable.

Another attraction is that it’s a very reliable dividend payer. Over the years, it has consistently lifted its payout (the yield is about 3.5% today).

Given these attributes, the stock tends to hold up well when markets crash. When things get rocky, it tends to see inflows of capital (especially from institutional investors).

There are no guarantees it will hold up well in future equity market meltdowns, of course. If the economy was to crash badly, consumers may trade down to cheaper supermarket brands.

I definitely see it as a ‘safer’ pick though. I think it’s likely to hold up better than a lot of other stocks in a crash.

Preparing for opportunities

One other key strategy that can be valuable during crashes is to buy shares! This could include reacting to specific index levels and putting money to work in readiness for a recovery. Imagine if the FTSE 100 fell to under 8,000 but later recovered to 11,000.

It could include also entry points for individual stocks (Rolls-Royce under 900p, for instance). For ideas on stocks to consider in a crash, you can find plenty of information right here at The Motley Fool.

The post How to shelter a SIPP from a nasty stock market crash appeared first on The Motley Fool UK.

On 12 February, Unilever declared a quarterly interim dividend of 46.64 euro cents (40.52p) per share. Anyone buying before the ex-dividend date will get that on 10 April. This isn’t the most dazzling income stock on the FTSE 100. The current trailing yield is around 3.1%. However, management has a pretty decent track record of raising shareholder payouts over time.

Unilever has increased shareholder payouts every year this millennium, bar the financial crisis in 2009 and freezes in 2022 and 2023 when the dividend held at 170.72 euro cents. It’s since edged up to 175.88 cents in 2024, then 182.48 cents in 2025. The yield isn’t huge but the income stream seems resilient. As ever, though, there are no guarantees.

FTSE 100 income growth stock

The share price is another matter. Once a steady monster performer, it’s been bumpier in recent years. The stock is up 9% over one year and 22% over five. With dividends included, that’s respectable, but hardly thrilling.

Why did I sell? At the time, I argued that Unilever’s “sprawling operations had led to a lack of focus”. It was trying to sharpen up by concentrating on 30 ‘Power Brands’, but progress looked patchy. I also questioned whether a lofty price-to-earnings (P/E) ratio of around 24 left much room for share price growth, unless sales and profits accelerated meaningfully.

Belatedly, the shares have sprung into life, jumping 12.7% in the last month. They were lifted by full-year results on 12 February, Unilever’s first since spinning off its ice-cream division.

Underlying sales growth for 2025 came in at 3.5%, in line with forecasts. Hardly eye-popping, although momentum picked up in the fourth quarter. Full-year profit surged 66% to €9.47bn, but that’s flattered by a €3.79bn gain from the ice-cream demerger. Profit from continuing operations rose a more modest 4.6% to €5.68bn. A €1.5bn share buyback was welcome.

A slightly lower P/E

Unilever’s valuation looks a little less demanding today, with the P/E dipping just below 20. The outlook doesn’t exactly blow me away though. Unilever expects 2026 sales growth at the bottom end of its 4% to 6% target range, reflecting softer market conditions. Inflation may be easing, but the cost-of-living squeeze hasn’t vanished.

As a defensive stock, Unilever has arguably done its job during choppy times. It still owns a formidable portfolio of everyday brands and is pushing harder on cost savings, cutting £670m last year while sharpening its focus on more profitable emerging markets.

Last week, analysts at Berenberg said the group has completed its transformation into “a simpler, more agile, faster-growing and more profitable business”. They still downgraded the shares from Buy to Hold though.

I think Unilever is worth considering for investors seeking steady income and growth. But personally, I can see more exciting opportunities on the FTSE 100, and will aim for those instead.

The post Unilever shares go ex-dividend on 26 February – time to consider buying them? appeared first on The Motley Fool UK.

Unilver reported 3.5% underlying sales growth, with 1.5% being down to actual volume growth. Of that, the company’s ‘Power Brands’ led the way with growth of 4.3% — and volumes up 2.2%. But revenue dipped a bit, due to currency movements and disposals.

We saw a modest 0.7% rise in underlying earnings per share (EPS) with margins improved since the ice cream business was split out to form The Magnum Ice Cream Company. Magnum reported a 20% fall in operating profit the same day — though it did face significant separation and restructuring costs.

What does this mean for shareholders?

Cash rewards

An underlying gross margin of 20% contributed to €5.9bn in free cash flow. As a result, the quarterly dividend is up 3%. And the board has launched a new €1.5 billion share buyback programme.

Unilever has been refocusing on core products and simplifying its business over the past few years. And it looks like it’s paying off. CEO Fernando Fernandez highlighted the target of “prioritising premium segments and digital commerce, and anchoring our growth in the US and India.” And he added: “Despite slowing markets, our sharper focus and disciplined execution underpin our confidence for 2026 and beyond.”

So what should we expect for 2026? Management guidance indicates underlying sales growth between 4% and 6% for the year, based on at least 2% underlying volume growth. And we should expect a “modest improvement” in the year’s operating margin.

All in all, I rate this as a solid performance in a time of pressured market conditions.

Value proposition?

Unilever shares have put on an impressive 27% over the past few years. And that does appear to have put a defensive premium on the stock now. EPS of 268p gives us a trailing price-to-earnings (P/E) ratio of 20 for the year just ended — significantly ahead of the FTSE 100 long-term average. And that’s for a stock with pretty average dividend yields a bit above 3%.

Forecast earnings growth in this kind of business is modest at best, even if it is positive in the current conditions. But it doesn’t look likely to bring the P/E down very far in the next few years.

My main fear right now is that Unilever shares perhaps look fully valued — or maybe even a bit toppy. And we could be in for a period of stagnation, especially if the recent ‘flight to safety’ among investors should ease off when today’s economic turmoil calms down. I suspect that’s why the revenue dip caused the results morning wobble.

This doesn’t mean I don’t rate Unilever as an investment. I still do, and I reckon new ISA investors should consider it as a relatively safe cornerstone for a long-term portfolio.

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