Unimpressive? Nestle Posts N22.2billion PAT..Proposes Dividend Not Befitting of Its Valuation

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Nestle Nigeria PCL released its 2013 FY audited results showing revenue rose 14% to N133billion (2012 FY: N116.7billion). Gross profit also rose 13.2% to N56.7billion (2012: N50.1billion).  Nestle posted a 5.3% increase in profit after tax to N22.2billion (2012 FY: N21.1billion).

Nestle proposed a dividend of N24 per share and closes its register of the 28th of April 2014 with a current dividend yield of just 2.2%. Nestle share price closed at N1071 losing N28.61 at the end of the trading today. Nestle was N1250 back in November. The result is may not be fantastic considering tepid growth but a N22billion PAT is its highest in Nigeria. Nestle result is also a remarkable 60% ROE and 28% DOA (both amazing stats).

The only problem therefore is the price. The current price of over N1,000 obviously is not justified by the tepid growth which seems likely to be sustained for the next two years. Nestle is a stock we will love to own but may not be willing to pay above N600 for it.

Nestle 2013 FY result was released in the website of the NSE