If someone entrusted me with $2.5 million to set up a trust fund for a loved one, one of the first purchases would be 1,000 shares of Unilever (UL). I use this fiction as the frame for this Unilever article because it is the type of stock you consider when pursuing a strategy of “income and growth at a reasonable price” investing.
It plays into that sweet spot of offering moderate earnings growth, decent current income, and the minimal possibility of capital loss. At the current price of $40.85, my guess is that Unilever shareholders will earn long-term annual returns of 8-9%. I anticipate this will come from a combination of the 3.4% dividend yield and expected 5% earnings growth that will translate into 5% annual capital gains. It would be a great way to give a beneficiary meaningful income to meet current living expenses while also positioning the trust fund for future growth that will fund lifestyle upgrades for years to come.