Nestlé: A Bargain for Dividend Hunters?

Last Updated: 18. Januar 2024By

Do you also rely on so-called „passive income,“ which is favored by followers of various dividend strategies? Perhaps this is how the NestlĂ© stock ended up in your portfolio.

The world’s largest food company regularly increases its dividend payments. In fact, the idea sounds promising at first. The Swiss company has been paying out more and more for many years. This applies both in absolute numbers (dividend per share) and in terms of dividend yield. In 2020, there was a Corona-related drop in sales, and profits fluctuated over the years. An increase is expected for 2023 compared to the previous year, but the result of the record year 2021 will probably not be achieved. With a P/E ratio of around 20 for 2023, the security is as cheap as it has been in a long time.

Massive image problems at NestlĂ© There may be good arguments for getting in now. The NestlĂ© stock could be undervalued. In addition, the prospect of steadily rising dividends could be attractive for long-term investors. The fact is, however, that the market prices in expectations regarding the future development of a company. In the case of NestlĂ©, the market observer thinks of the image problems at the world’s largest food company. The list of accusations is long: rainforest destruction, contaminated baby food, bacteria in frozen pizza, questionable business practices in drinking water, unnecessary animal testing, etc. On its website, the company already has a focus on sustainability and presents corresponding approaches for individual brands. Quote: „Kitkat will be climate neutral by 2025.“

Continuing downtrend for Nestlé stock Currently, the bears have the security under control. Both on the bottom and on the top, we see a series of lower lows and lower highs, indicating a sustained downtrend.

NestlĂ© stock (ISIN CH0038863350) – 1 year in daily chart; Source: aktienscreener.com

Conclusion The statements on the company’s website do not help with decisions on stock matters, but a look at the chart does!