The Unilever (LSE: ULVR) share price is lastly beginning to stay up to its potential. It’s jumped a powerful 25.38% within the final six months, and is up 15.27% over the yr.

Since I maintain the shares myself, I’m thrilled. This seems to vindicate my technique of shopping for prime FTSE 100 firms once they’ve fallen out of favour, within the hope of benefitting once they spring again into life.

I purchased my first Unilever shares in June final yr, which promptly dropped and left me dealing with a double-digit paper loss. Now I wanted I’d purchased extra on the lowered price. I did load up on the inventory in Might this yr, and once more in June. Now I’m going to take a seat again and benefit from the journey.

FTSE 100 restoration play

I’m up 15.14% to this point (plus a few dividends) and I reckon there’s much more to return. I plan to carry the inventory for years. Many years even.

The patron items big ought to do fairly nicely at each stage of the financial cycle. Individuals nonetheless want to wash their houses and wash their hair in a recession. When the economic system is doing nicely, they’ll spend a bit extra freely.

Even inflation shouldn’t be a barrier to development, as Unilever’s array of manufacturers provides it pricing energy, permitting it to move on increased labour and supplies prices to clients.

But it’s doable to take a superb factor too far. Unilever boasts of getting lots of of manufacturers, however in observe its focus has been too broad and obscure.

CEO Hein Schumacher has focused the issue and has been seeking to offload lesser manufacturers comparable to Timotei, Impulse, and Brylcreem, to give attention to the winners. But his overhaul nonetheless has some technique to run.

On 26 July, analysts at Berenberg hailed a return to “high-quality earnings growth”, up 3.9% yr on `yr. Let’s see what the chart says.

Chart by TradingView

Increased earnings have been pushed by the long-awaited revival of “volume growth and gross margins”, Berenberg says. The dealer hiked its goal price for the inventory from £49.60 to £55.70. At the moment, the shares commerce at £48.43p, in order that’s a possible improve of one other 15%.

Development and dividends

Unilever shares aren’t the cut price they have been, having recovered from final yr’s trough to commerce at 21.09 instances earnings right now, as this chart reveals.

Chart by TradingView

It’s by no means been an incredible earnings inventory and the yield has declined to three.06%. Dividend development has been sluggish these days. The board lower the shareholder payout to €1.46 per share in full-year 2021, then lifted it barely to €1.48 in 2022 and held it there in 2023.

There’s additionally a threat that right now’s world uncertainty may smother the restoration. Nevertheless, I famous that in Friday’s meltdown Unilever was a uncommon winner, rising 1.34% as its defensive skills shone via. I believe it may go on an extended bull run. In that case, I’ll be thrilled to have gotten in early.