NSRGY - Nestle: Market Saturation And Cannibalization Problem

2024-06-02 23:15:08 ET

Summary

• Nestle shares have underperformed the S&P 500 for the past decade due to a lack of growth and unsuccessful optimization efforts.
• Nestle's dividend appeal is not enough to justify investing, as a dollar from dividends is not worth more than a dollar from price appreciation.
• Market saturation, cannibalization, and slow efficiency initiatives contribute to Nestle's inability to generate growth, making it a borderline Sell.

Nestle ([[NSRGY]], [[NSRGF]]) shares have severely underperformed the S&P 500 for essentially any time period you choose over the last decade, and rightfully so.

Efforts to optimize the portfolio, divest underperforming brands, and improve efficiency, have yet to bear fruit, with Nestle's revenues at the same level they were back in 2018, generating a similar margin....

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