In the world of investing, the quest for long-term wealth generation is a journey filled with both promise and peril. As an investor, I'm always on the lookout for stocks that can weather the storms of the market and provide a solid foundation for my portfolio. One such stock that has captured my attention is Unilever (LSE:ULVR).
What makes Unilever particularly fascinating is its position as a consumer goods giant. In a world where tech fads come and go, and retailers rise and fall, Unilever's brands like Dove, Knorr, Hellmann's, Vaseline, and Axe remain household staples. This is what I call a 'set-and-forget' investment - a company whose products people will continue to buy, regardless of the economic climate. The fact that Unilever's revenue has grown at a compound annual rate of about 1.5% a year since 2015 is a testament to its resilience and stability.
However, what many people don't realize is that Unilever is not without its challenges. Fierce competition, supply chain disruptions, and pricing pressure are just a few of the risks that can impact profits. In 2022 and 2023, Unilever had to pause its dividend growth to preserve capital, which is a reminder that even the most stable companies can face tough times. But this is where the real beauty of Unilever lies - its ability to adapt and improve over time.
Unilever's operating margin has increased from 14.1% to 15.5% since 2015, and its cash flow has increased at an annualized rate of roughly 3% a year. This is the kind of sustainable improvement that I look for in a long-term holding. It's not about rapid, volatile growth, but rather a steady, reliable improvement that can compound over decades.
One thing that immediately stands out is the fact that Unilever's revenue dropped slightly in 2025, down to €50.5bn from €52.5bn, due to foreign currency fluctuations and portfolio effects. But this is a minor blip in the grand scheme of things. The long-term trend is one of steady growth and improvement, which is exactly what I'm looking for in a 'set-and-forget' investment.
In my opinion, Unilever is a strong candidate for a decades-long commitment. It's a company that I'm comfortable holding for years, rather than constantly worrying about the next quarter. But it's important to keep your options open. Aside from Unilever, two other strong candidates for a decades-long commitment are AstraZeneca and RELX. Each of these companies has its own unique strengths and weaknesses, and they all deserve a closer look.
In conclusion, when targeting decades-long wealth generation, a strong foundation is key. And in my view, Unilever is a solid foundation for any investor's portfolio. But the market is ever-evolving, so it's important to keep abreast of new developments and be ready to adapt. As an investor, I'm always on the lookout for the next big thing, but I also know the value of a stable, reliable company like Unilever. It's a company that I'm happy to hold for decades, and I believe it can provide a solid foundation for any investor's portfolio.
