{"id":16088,"date":"2017-09-16T13:43:36","date_gmt":"2017-09-16T17:43:36","guid":{"rendered":"http:\/\/www.pgmcapital.com\/?p=16088"},"modified":"2017-09-16T13:43:36","modified_gmt":"2017-09-16T17:43:36","slug":"why-investing-in-nestle-can-very-lucrative","status":"publish","type":"post","link":"https:\/\/www.pgmcapital.com\/nl\/why-investing-in-nestle-can-very-lucrative\/","title":{"rendered":"Why Investing in Nestl\u00e9 can very Lucrative"},"content":{"rendered":"

Dear PGM Blog reader,<\/p>\n

In this weekend blog article, we want to take the opportunity to discuss with you why Investing in Nestl\u00e9 can be lucrative for value investors.<\/p>\n

INTRODUCTION:<\/h3>\n

Nestl\u00e9 S.A.<\/b>\u00a0(NESN:VTX) is a Swiss\u00a0transnational\u00a0food and drink company headquartered in\u00a0Vevey,\u00a0Vaud, Switzerland. It has been the largest food company in the world, measured by revenues and other metrics, for 2014, 2015, and 2016, with a market capitalization of roughly 231\u00a0billion Swiss francs.<\/p>\n

The company was formed in 1905 by the merger of the\u00a0Anglo-Swiss Milk Company<\/b>, established in 1866 by brothers George and Charles Page, and\u00a0Farine Lact\u00e9e Henri Nestl\u00e9<\/b>, founded in 1866 by\u00a0Henri Nestl\u00e9(born Heinrich Nestl\u00e9).<\/p>\n

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Nestl\u00e9\u00a0has 447 factories, operates in 194 countries, and employs around 339,000 people.\u00a0It is one of the main shareholders of\u00a0L’Oreal, the world’s largest cosmetics company.<\/p>\n

The company’s\u00a0products include\u00a0baby food,\u00a0medical food, bottled water, breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. Twenty-nine of Nestl\u00e9’s brands have annual sales of over 1\u00a0billion Swiss Francs (CHF), approx. 1.1\u00a0<\/span>billion US-Dollars.<\/p>\n

NESTL\u00c9 THE CASH MACHINE:<\/h3>\n

Nestle’s business is a strong and stable cash-producing machine, which offers a 2.95% dividend yield, has\u00a0increased its dividend\u00a0over time, maintains a strong economic moat and has reliably generated organic growth while selectively making strategic acquisitions.<\/p>\n

As can be seen from below chart, the company’s dividend has increased exponentially over the last 33 year, from CHF 0.10 a share for FY-1982 to CHF 2.30 a share for FY-2016,\u00a0representing\u00a0a 2,150% increase over the base rate on a per share basis, assuming no dividend reinvestment on the part of the owner.<\/p>\n

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As can be seen from above chart the company was able to increase its dividend during the great recession of 2008-2009 for which from fiscal year 2006 to FY-2015, the company increased its dividend from CHF 1.04 a share to CHF 2.30 a share, an increase of 121 percent in 10 years.<\/p>\n

PGM CAPITAL ANALYSIS & COMMENTS:<\/h3>\n

It is rare to find a company with a\u00a0strong dividend, a high moat, and solid growth potential, but Nestle\u00a0has all three and is one of the best\u00a0blue-chip dividend stocks.<\/p>\n

Above chart of the company’s dividend payout shows, that Nestl\u00e9’s dividend pay-out up to now kept on growing Year-Over-Year over a period of war and peace, inflation and deflation, and stock market booms and busts.<\/p>\n

When comparing the share price performance of the company with the performance of the DOW-30, over the past 21 years, we can see that the shares of Nestl\u00e9 has performed approx. 250 percent better than the DOW-30 Index, as can be seen from below chart.<\/p>\n

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The blue line represents the share price performance of Nestl\u00e9 and the green line shows the performance of the DOW-30<\/p><\/div>\n

Based on the company’s fundamentals, strong Balance sheet and with an approximates a compound annual growth rate in the dividend of 9.9% per annum, we have a STRONG BUY rating on the shares of the company.<\/p>\n

To make a long story short,\u00a0Nestle is a great company, at a fair price. It’s the best dividend growth stock nobody talks about.<\/p>\n

Last but not least, before taking any investment decision, always take your investment horizon and risk tolerance into consideration and keep in mind that; share prices don’t move in a straight line and that Past Performance Is Not Indicative Of Future Results.<\/p>\n

Yours sincerely,<\/p>\n

\"\"<\/a><\/p>\n

Eric Panneflek<\/p>\n","protected":false},"excerpt":{"rendered":"

Dear PGM Blog reader, In this weekend blog article, we want to take the opportunity to discuss with you why Investing in Nestl\u00e9 can be lucrative for value investors. INTRODUCTION: Nestl\u00e9 S.A.\u00a0(NESN:VTX) is a Swiss\u00a0transnational\u00a0food and drink company headquartered in\u00a0Vevey,\u00a0Vaud, Switzerland. It has been the largest food company in the world, measured by revenues and[…]<\/a><\/p>\n","protected":false},"author":2,"featured_media":16109,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[51],"tags":[],"class_list":["post-16088","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pgm-capital-blog"],"_links":{"self":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/16088","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/comments?post=16088"}],"version-history":[{"count":18,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/16088\/revisions"}],"predecessor-version":[{"id":16110,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/16088\/revisions\/16110"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media\/16109"}],"wp:attachment":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media?parent=16088"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/categories?post=16088"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/tags?post=16088"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}