If I’d invested £1,000 in Unilever shares at the start of 2022, here’s how much I’d have now

British multinational consumer goods company Unilever (LSE: ULVR) is one of those incredibly rare stocks that offers shareholders growth in shares with regular and sizable dividends.

It is no wonder that the company has grown to a value of £102bn, making it the fourth largest on the London Stock Exchange.

Should I take some stock myself? Yes, I think one of the strengths of Unilever is that it is a safe but profitable investment in downturns because of its strong brand diversity like dove, Hellmann’s and Magnum.

The last year or so has been a lot for the market, so let’s see how a £1,000 stake in this company will do.

How much is £1,000 worth today?

Unilever’s share price was £39.46 at the start of 2022 and has risen to £40.86 at the time of writing. A modest 3.5% increase in the share price alone then. It’s not too bad, but I also need to apply the dividend.

Dividends from the start of 2022 have been paid monthly at 36.02p, 35.9p, 36.33p, 37.22p and 38.12p. The last one will be paid in a few days, on March 21st, but I will include it for good. Now the share price is up to £42.70, an increase of 8.2%.

£1,000 worth of Unilever shares will cost £1,082. The return is okay for just over a year, but during the stock market correction and cost-of-living crisis? I will be very happy.

Oh, and the actual return would be even higher if I reinvested those dividends straight back into other stocks.

So this is enough proof for me to go all in the consumer goods company? Of course not, and here’s why.

Two things I need to remember

Calculations like the above can be useful in helping me choose stocks to invest in. After all, the stocks that give me the highest returns are the ones I want in my investment account. That way, I can participate in the company’s success. But there are two dangerous problems with blindly looking at the stock’s past returns.

First, if I want to open a position in a stock, past performance is just a piece of the jigsaw. I want to own shares in a good company that will grow. For this, research is very important.

In the case of Unilever, the important detail is the strength of the company’s strong brand. People buy Magnum because they like the brand, not because they want the cheapest ice cream they can get. This is good in an inflationary environment like the current one, because the rising costs can be passed on to the customer.

The second problem is that stocks and the markets in which they operate are unpredictable. Even good companies can have a year or two.

A good strategy for building long-term wealth is to invest in a few carefully selected companies. This will smooth the rise and fall of any single stock.

In this case? I like Unilever on balance and can see a future as successful as the past. So, I will open a position in the company in the future.