Forget the HSBC share price! I think this is a great FTSE 100 for both income and growth

The HSBC (LSE: HSBA) share price has been a big winner from the stock market rebound following positive vaccine news. So much so I no longer think the shares are a buy. Indeed, I’ve recently taken the chance to dump my entire modest stake. Instead, I’m trying to find great FTSE 100 shares that can provide year-on year-income from dividends and share price growth.

One such share, in my view, is Unilever (LSE: ULVR). Another is Aviva (LSE: AV). I expect both will be able to outperform HSBC over the next year and also over a longer timeframe of say three or five years. 

A FTSE 100 share with more growth potential than the HSBC share price

Unilever owns well-known brands across the food, beauty, and home care categories. These include Ben & Jerry’s, Dove, and Domestos. Strong brands give it pricing power, which helps keep margins high. It’s a business that has fantastic economies of scale. It can also acquire smaller, faster growing brands. This means it can stay relevant with consumers. All this combines nicely I think for good sustainable, long-term growth. Many professional money managers agree. 

Rob Burgeman of Brewin Dolphin says: “It’s a great company in which to own shares. It makes real things that real people need – and pays a real dividend. The yield is 3.29 per cent”. 

He’s far from the only fan. Finsbury Growth & Income investment trust has 10.7% of its assets in Unilever, while Lindsell Train Global Equity fund also has the FMCG as the top holding. The manager of both, highly respected Nick Train, likes Unilever’s “incredible predictability”. The City of London investment trust, which is a reliable dividend payer, also has a stake in Unilever.

Overall I think Unilever is a steady company that should compound over time and this is why an FMCG has a place in every investor’s portfolio.

New CEO shaking things up at Aviva 

When it comes to Aviva, history doesn’t provide much confidence. It’s been through several CEOs in recent years and the share price has left much to be desired. The one saving grace was a high dividend yield, but that was cut completely early in the pandemic.

However, investing is really about the future. The new CEO, Amanda Blanc, is moving faster than her predecessors to offload international operations. For example, this year Aviva sold its stake in its Italian joint venture Aviva Vita for €400m.

The leaner group could make it more attractive to a buyer. Indeed there have been rumours of a takeover. These have more credence after RSA Insurance was acquired just last month for £7.2bn, which was around a 50% premium to the share price at the time. RSA under Stephen Hester also sold international businesses in the years before it was bought. Could Aviva be on the same path? 

Even if not bought, by being leaner Aviva should become more profitable and efficient; that should unlock value for shareholders. So, I think it’s a better investment than HSBC right now.