Unilever vs Nestlé Which Should You Buy?

Unilever and Nestlé are two major players in the global consumer goods industry, both known for their diverse portfolio of products and strong market presence. As investors consider which stock to include in their portfolios, they often weigh the performance of these two companies against each other. Unilever has shown steady growth and stability, while Nestlé boasts strong financials and a history of consistent returns. Ultimately, the decision between Unilever and Nestlé stocks comes down to individual investment goals and risk tolerance.

Unilever or Nestlé?

When comparing Unilever and Nestlé, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Unilever and Nestlé.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Unilever has a dividend yield of 3.86%, while Nestlé has a dividend yield of 6.94%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Unilever reports a 5-year dividend growth of 0.22% year and a payout ratio of 64.35%. On the other hand, Nestlé reports a 5-year dividend growth of 6.70% year and a payout ratio of 69.76%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Unilever P/E ratio at 20.64 and Nestlé's P/E ratio at 18.03. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Unilever P/B ratio is 6.75 while Nestlé's P/B ratio is 6.15.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Unilever has seen a 5-year revenue growth of 0.24%, while Nestlé's is 0.16%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Unilever's ROE at 34.58% and Nestlé's ROE at 32.67%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $56.87 for Unilever and $87.07 for Nestlé. Over the past year, Unilever's prices ranged from $46.46 to $65.87, with a yearly change of 41.78%. Nestlé's prices fluctuated between $87.07 and $117.55, with a yearly change of 35.01%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.