A staple brand name in most households, Nestle SA (NESN.SW) has built a business out of providing quality packaged food goods, ranging from snack foods, coffee products, and even pet care products under their Purina brand. As with any large-capitalization company, most investors looking to dip into “blue chip” territory will likely look at brands like Nestle to help diversify their portfolio with stable stocks.
But it’s important to review if this intuitive stock pick matches up with their historical price performance. In this article, we will briefly dive into Nestle’s quantitative performance as well as some qualitative signals that may affect market perception.
Price History: Stable as they Come
If intuition is an indicator of stock performance, then Nestle falls right into most people’s assumptions as a solid company for long-term growth. At the current price of CHF 123 (April 7, 2022), they currently enjoy a positive return of 13.06 % for the past 52-weeks, as well as a market beta of 0.26, indicating that it is relatively less volatile in comparison to the market index movements. Wild swings are likely to leave Nestle’s overall price unaffected by comparison, lending it a good option for those looking for stable diversification.
Qualitative Analysis: Global Crisis and Food
While CPG isn’t necessarily an exciting source for financial news, Nestle has recently found itself under scrutiny for their previous continued operations in Russia despite global condemnation for the current war in Ukraine.
Despite halting Russian operations after criticisms stemming from country partners and Ukraine itself, Nestle had defended its earlier stance by saying that food should remain a basic right and shouldn’t be withheld as a means of sanction.
Regardless of their reasonings, it seems that the continued and subsequent halting of operations have done little to affect Nestle’s overall market price. While media perception may have remained negative, Nestle’s position as a company with stable growth over long periods of time remains. For the investor looking to diversify into stable stocks, Nestle is definitely a deal for your next stock purchase.
Note: Please do not invest money or assets in the financial markets that you cannot afford to lose. This article should not be construed to be investment advice and is for information purposes only