Unilever Trading Statement

[Dod101]

I have been away for a couple of days. This is a very conservative company, even if maybe a little less conservative than it was following the approach from Kraft Heinz. The Trading Statement is just noise, in investing terms. I think it highly unlikely that they will cut their dividend; in fact even to talk of that is nonsense, considering they are currently increasing it significantly. The share buyback will significantly reduce the number of shares in issue which will only help the continuing shareholders and will reduce the aggregate cost of the dividend. This company is one of the world's major consumer groups and as such is highly prized. Hang in there!

That's what I think anyway but DYOR

Dod

[ADrunkenMarcus]

There's always something to worry about with any company, but I wouldn't worry too much about Unilever. Since I bought it in 2013, the dividend per share has increased around 47% and I expect a lot more growth to come over the long term.

Best wishes

Mark.

[idpickering]

There's always something to worry about with any company, but I wouldn't worry too much about Unilever. Since I bought it in 2013, the dividend per share has increased around 47% and I expect a lot more growth to come over the long term.

Best wishes

Mark.

Well put Mark. I'm not even remotely concerned about holding shares in Unilever. A top notch company IMHO.

Ian.

[absolutezero]

There's always something to worry about with any company, but I wouldn't worry too much about Unilever. Since I bought it in 2013, the dividend per share has increased around 47% and I expect a lot more growth to come over the long term.

Best wishes

Mark.

Well put Mark. I'm not even remotely concerned about holding shares in Unilever. A top notch company IMHO.

Ian.

Except the yield.
ULVR is a great company, and I want to buy more, but on a yield of just 3.5% I am a bit reticent to do so.

[Dod101]

ULVR is a great company, and I want to buy more, but on a yield of just 3.5% I am a bit reticent to do so.

Well 3.5% is a decent enough yield and it is relatively low because it is perceived as being secure and with a long history of growth in that dividend. Compare it with say HSBC where the dividend yield is around 5.5%. It is an equally secure company I think (ie it is not in danger of doing a Carillion any more than Unilever is) but the directors have repeatedly said that whilst the dividend is secure they have also made it clear that shareholders should not expect any increase for 2018 or 2019. Take your choice. Which would you rather have? Or you can be like me and hold both but I am aware that I am unlikely to see much capital growth from HSBC nor dividend growth over the next year or two.

Dod

[OLTB]

Morning all

As I am not yet drawing on my HYP and have many years to go before I do, I am happy to hold and add to ULVR. I am banking on ULVR continuing to increase dividends over the years so that any income currently received will tick up by the time it's needed in the years to come.

If I were moving into retirement now, I may have a different perspective as there are better income yields available, however, as has been pointed out on these boards many times, we shouldn't always chase yield. Perhaps we all need a ULVR in our HYPs for that little (although not guaranteed) certainty.

Cheers, OLTB.

[vrdiver]

Morning all

As I ... have many years to go, I am happy to hold and add to ULVR. I am banking on ULVR continuing to increase dividends over the years so that any income currently received will tick up by the time it's needed in the years to come.

Cheers, OLTB.

Edited out some of your words to make clear my own emphasis on why I hold Unilever!

I've noticed a number of posts where fellow LFs express a change in their investment thinking at the point of retirement, but if you plan to retire for as long, or even longer than you worked, investments still need to be considered for the long term!

VRD

[idpickering]

Morning all

As I ... have many years to go, I am happy to hold and add to ULVR. I am banking on ULVR continuing to increase dividends over the years so that any income currently received will tick up by the time it's needed in the years to come.

Cheers, OLTB.

Edited out some of your words to make clear my own emphasis on why I hold Unilever!

I've noticed a number of posts where fellow LFs express a change in their investment thinking at the point of retirement, but if you plan to retire for as long, or even longer than you worked, investments still need to be considered for the long term!

VRD

On the retiring aspect, and HYP management, I have effectively "retired" aged 56, and have not changed my stance, or planning/management of my HYP at all. It is being used as it should, that is long term hold, and an income providing machine.

Ian.

[kempiejon]

On the retiring aspect, and HYP management, I have effectively "retired" aged 56, and have not changed my stance, or planning/management of my HYP at all. It is being used as it should, that is long term hold, and an income providing machine.

Ian.

Ian I meant to pose this question a month ago or more when following your advertised retirement to the wilds of Scotland you're still updating us with monthly purchases and filling the ISA for the new year; when will you start spending the dividends and stop re-investing or are you doing that and the ISA was a tax planning activity?
I'm probably going to be able to make the switch from investor to spender within a few years but I'll probably start by selling down unsheltered low yielders and exciting some of my non income holdings as that becomes appropriate. I'm also building a cash buffer of a few years of expenses.

[absolutezero]

ULVR is a great company, and I want to buy more, but on a yield of just 3.5% I am a bit reticent to do so.

Well 3.5% is a decent enough yield and it is relatively low because it is perceived as being secure and with a long history of growth in that dividend. Compare it with say HSBC where the dividend yield is around 5.5%. It is an equally secure company I think (ie it is not in danger of doing a Carillion any more than Unilever is) but the directors have repeatedly said that whilst the dividend is secure they have also made it clear that shareholders should not expect any increase for 2018 or 2019. Take your choice. Which would you rather have? Or you can be like me and hold both but I am aware that I am unlikely to see much capital growth from HSBC nor dividend growth over the next year or two.

Dod

Yes. Dividend growth is just as important as the yield at which we buy.
For what it's worth I have stopped vacillating and have topped up on Unilever (and Persimmon).

[ADrunkenMarcus]

Yes. Dividend growth is just as important as the yield at which we buy.

Over a thirty year retirement, I think decent dividend growth (above inflation) is essential otherwise even the highest initial yielding HYP will see its income stream reduced in real terms.

Best wishes

Mark.

[idpickering]

On the retiring aspect, and HYP management, I have effectively "retired" aged 56, and have not changed my stance, or planning/management of my HYP at all. It is being used as it should, that is long term hold, and an income providing machine.

Ian.

Ian I meant to pose this question a month ago or more when following your advertised retirement to the wilds of Scotland you're still updating us with monthly purchases and filling the ISA for the new year; when will you start spending the dividends and stop re-investing or are you doing that and the ISA was a tax planning activity?
I'm probably going to be able to make the switch from investor to spender within a few years but I'll probably start by selling down unsheltered low yielders and exciting some of my non income holdings as that becomes appropriate. I'm also building a cash buffer of a few years of expenses.

Hi kempijon, thanks for your question.

As for using up my ISA allowance, more than likely this will be the last time we'll have the readies in order to do that. On the sale of our house in Nottinghamshire we achieved such a good price to buy a house here in Orkney, and have enough money left over to not have to spend our incoming dividends currently. As time moves on I guess we will get to the stage of using the dividend cash to live on, but for now, the dividends received are held as cash in my ISA, and then invested back into the HYP on a monthly basis. I had to hold off from putting the full £20k into my ISA because I have to put £20 per month into my ISA held with Halifax in order to meet their monthly investment facility rules. So, I held back £240 from the total £20k in order to continued with my monthly dollops of cash being invested. In effect, £20 new money each month, added to the dividends received thus far that month, then invested.

It is not my intention to sell any of our holdings for the foreseeable future, and intend to be more 'hands-off' going forward. Should I choose to do so, it'll be the lower yielders that get dumped first.

That £20k was just spare, and sat there in our current account doing nothing, so we decided to make it work for us instead.

Your planning seems sound IMHO.

Regards,

Ian.

[kempiejon]

Ian,

Thanks for coming back to my question, I'd not clocked your downsize and that release of capital in the equation. So for now it's a spenddown of surplus capital for a while then into dividend drawing. Will you be holding back a cash buffer to smooth any dividend bumps along the way?

Back on topic, in my own HYP, Unilever plays a nice ballast by increasing it's dividends year on year, it's been in my HYP for about 10 years (rarely a HYP pick in that time but I think I was lucky to get >4%) and in that time dividends have increased by an average of 7% annually. Like you Ian, I have no plans to redirect my management style when I cease adding new cash gathered from my toils in the mines to the portfolio hopefully a small income excess can be redirected to even more security of dividend income. But I suppose I will have to wait and see - hopefully not wait to long for I've been 10 years on this investing lark and I'd like to see the fruits soon.

[idpickering]

Ian,

Thanks for coming back to my question, I'd not clocked your downsize and that release of capital in the equation. So for now it's a spenddown of surplus capital for a while then into dividend drawing. Will you be holding back a cash buffer to smooth any dividend bumps along the way?

Back on topic, in my own HYP, Unilever plays a nice ballast by increasing it's dividends year on year, it's been in my HYP for about 10 years (rarely a HYP pick in that time but I think I was lucky to get >4%) and in that time dividends have increased by an average of 7% annually. Like you Ian, I have no plans to redirect my management style when I cease adding new cash gathered from my toils in the mines to the portfolio hopefully a small income excess can be redirected to even more security of dividend income. But I suppose I will have to wait and see - hopefully not wait to long for I've been 10 years on this investing lark and I'd like to see the fruits soon.

Hi kempijon,

Cheers for your reply. Effectively, that's the plan, spend the surplus cash first, and yes, we will be holding back a cash buffer. Not only to smooth out any issues with dividends, but for the occasional drama that might occur in life.

I've held Unilever since 8 Jan 2007, and apart from an error on my part when I sold them on 12 Jul 2017, (to take some profits, not very HYP) then realised my folly and bought them again pretty sharpish on 25 Jul 2017, they've been a main stay in my HYP throughout it's existence. I have the utmost respect for those that toil in the mining industry.

Ian.

[kempiejon]

I have the utmost respect for those that toil in the mining industry.

I was speaking metaphorically, I don't have anything to do with that industry.

[idpickering]

I have the utmost respect for those that toil in the mining industry.

I was speaking metaphorically, I don't have anything to do with that industry.

No worries. But my comment still stands regarding those that do.

Ian.