Ive been working out how a number of our top FTSE 100 shares have been performing over the past decade. And while its great to see the massive profits from high flyers like ARM Holdings, it can be more educational to see how the allegedly slow but steady members of the index have been faring.
Boring but safe
So Im turning my attention today to Unilever (LSE: ULVR) (NYSE: UL.US).
Unilever makes a whole host of household cleaning products, personal hygeine brands, and foodstuffs things like Lipton, Walls, Knorr, Hellmans, Lux, Cif, Sunlight, Dove, Sunsilk, Flora and Domestos and many more, with more then a dozen of its brands bringing in annual sales of more than 1bn.
A good defensive stock, then, so how well did Unilever reward its shareholders over the past 10 years?
A 2.5 times gain?
With shares changing hands for 1,000p a decade ago (allowing for a stock split in May 2006), a 10,000 investment would have conveniently covered the price of 1,000 shares. Ten years later with Unilever shares fetching 2,570p, youd have enjoyed a whopping 157% rise to 25,700. So your initial investment would be worth more than 2.5 times as much today and thats a terrific performance, especially compared to the measly returns youd have got from a savings account.
But thats really only the start, as Unilever has been paying steady dividends every year too. Yields have come in around 3.5% to 4%, which is a bit better than the FTSE 100 average but more importantly, the annual cash has been rising faster than inflation.
The cash
In total, if youd stashed your annual dividends under your mattress, youd be sleeping on a bumpy extra 6,252 by today so youd have had 62.5% from dividends alone, which is itself easily enough to beat cash in the bank even ignoring your massive capital gain. In total, youd be sitting in a nest egg of 31,952.
But were still not finished. If youd reinvested the cash every year instead of just keeping it, youd expect that to bump your final total further, wouldnt you?
But would you have expected an additional 3,794 to add to the pile?
No, 3.5 times!
Overall, with dividends reinvested, youd have turned your original 10,000 into a very desirable 35,746!
And thats from boring, plodding, old Unilever, and its unexciting range of soaps, tea and the likes.
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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK owns shares of Unilever. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
