This year, many FTSE 100 businesses have been forced to slash their shareholder distributions. Dividend cuts and deferrals of UK companies have now topped £30bn. This has left income investors with a large hole in their portfolios. However, there is at least one FTSE 100 dividend stock that has been able to avoid the carnage.Â
FTSE 100 dividend stock to buyÂ
Unilever (LSE: ULVR) is one of the FTSE 100’s top income stocks. With a dividend yield of around 3.1% at present, the company does not offer the highest level of income in the FTSE 100. The average yield in the index is about 4%. Still, what the group lacks in yield it more than makes up for in sustainability.Â
As one of the world’s largest consumer goods companies, Unilever is a reasonably defensive business. Its recent trading update showed just how defensive the group’s operations are, especially in uncertain times.
Underlying sales declined by 0.3% in the second quarter. That’s the first time in 14 years the FTSE 100 dividend stock has reported a decline in sales, but considering the impact coronavirus has had on the global economy, it’s highly impressive.Â
Rising sales of cleaning products and ice cream helped the business offset declines in other areas. Sales of ice cream jumped 26% in the second quarter. This performance allowed management to keep the company’s dividend payout in place.Â
Long-term strengthÂ
Unilever’s performance over the past six months shows why the company is a champion FTSE 100 dividend stock, in my opinion. The group’s international operations and defensive product lines have helped it navigate the pandemic with relative ease.Â
These advantages may also help the business prosper for many years to come. Unilever’s profitability means the company has plenty of cash to reinvest back into its operations. This implies that the corporation can continue to change with the times and meet changing consumer tastes.Â
This could also be a positive for the company’s dividend growth. Thanks to rising profitability, the FTSE 100 dividend stock has been able to increase its annual payout to investors by a third over the past six years. As management continues to invest in the group’s growth, it seems highly likely this trend will continue.Â
The bottom lineÂ
The outlook for the global economy is highly uncertain at present. However, Unilever has shown over the past six months that the company has what it takes to navigate the storm successfully. This suggests that no matter what happens throughout the rest of 2020, the FTSE 100 dividend stock may continue to register a positive performance.Â
What’s more, despite its recent performance, the stock is still trading nearly 20% below its all-time high reached in September 2019. This implies that the blue-chip income champion may offer a margin of safety at current levels.
As such, now may be a good time to snap up a share of this FTSE 100 dividend stock.