Until a few months ago, investors had collectively thumbed their noses at slow, strong and steady companies. Instead, ‘to the moon’ tech stocks boasting high growth and industry disruption were all the rage. Now, with many of those firms appearing to have over-promised, and with stagflation concerns mounting, a new light is shining on the defensive qualities of the old masters of the universe.
IC TIP:
Buy
Tip style
Growth
Risk rating
Medium
Timescale
Long Term
Bull points
- Proven ability to raise prices
- Defensive product volume mix
- Focus on reinvestment
- Consistent dividend growth
Bear points
- Health food legislation uncertain
- Consumer limits to price rises
The world’s largest food and beverages firm, Nestlé (CH:NESN), is one such business. The food giant started as an infant formula firm in Vevey, Switzerland in 1867, and now owns more than 30 ‘billionaire’ brands, such as KitKat bars, San Pellegrino water, and Nescafé coffee grounds, which account for three-quarters of sales.