Here’s Why Daimler is NOT a Better Investment than Nestle is another great post by Jimbo over at Capitalstool.com
Whenever I want a good laugh I read the Economist!!!!!
Liquidity moves markets!Follow the money. Find the profits!
I just read an entertaining article how Daimler is a better investment than Nestle.
I beg to differ!!!!!
Daimler has basically no free cash flow and is increasing its debt to pay its over generous dividend and to cover CAPEX.
(Coyote Cliff ETF candidate anyone?????}
It will have to eliminate its dividend.
What will happen to the stock then.
Nestle generates $11 Billion in free cash flow a year very consistently.
It has quite a wide moat that protects is free cash flow.
Stock about 30% overvalued but still valuable.
Why is all this so????
Because Daimler has to spend $10 billion a year on CAPEX while Nestle only spends $4 billion a year.
Its just a much more structurally superior business.