Since it started out here in 1912 as the Anglo-Swiss Condensed Milk Co, Nestlé Malaysia has been manufacturing simple and nutritious food and, today, makes more than 300 halal products in eight factories. Judging by the popularity of Maggi instant noodles, it is no surprise that its Batu Tiga Maggi line is the biggest noodle factory in Malaysia. A testament to its commitment to invest in Malaysia, Nestlé Malaysia’s Shah Alam manufacturing site is one of the largest in the Nestlé family.

In 2015, six of its eight factories successfully maintained “Zero Landfill Status”, recycling all solid waste materials — one of many reasons Nestlé Malaysia ranks highly in terms of corporate responsibility and sustainability efforts. Through sustainable contract farming schemes such as the Nestlé Chili Club and Nestlé Paddy Club, local farmers get better yields and income while Nestlé Malaysia gains high-quality, sustainable agricultural produce.

Other than keeping consumers happy, investors would also be pleased with its earnings and dividends.

Pre-tax profit grew an average of 4.5% a year for the past three years to RM727.7 million in FY2015 from RM637.67 million in FY2012 — decent for a company its size. Net profit grew to RM590.73 million in FY2015 from RM505.35 million in FY2012.

Not only has the company been paying out more than 95% of its earnings as dividends for at least the past eight years, the quantum has also increased significantly with the growth in its profit. Collectively, it paid out RM3.7 billion in dividends between FY2008 and FY2015.

Going by the projected consensus dividend per share (DPS) of RM2.63 for FY2016 and RM2.76 for FY2017, yield is 3.3% and 3.5% as at Aug 16’s RM79.10 close. Indicative yields are 3.6% to 3.8%, if one were to believe the highest DPS projection of RM2.84 to RM3, according to Bloomberg data.

Eleven of the 12 analysts tracking the stock are “neutral”, with the single “outperform” call coming from Kenanga Investment Bank, which has an RM82.10 target price on Nestlé Malaysia. Its target price is based on 27.1 times FY2016 earnings. Kenanga was impressed by its first-quarter earnings, which saw the company benefit from lower input costs and improved operational efficiency.

“We anticipate the group [will] stay committed in marketing and promotional activities in order to stimulate consumer sentiment and encourage spending,” Kenanga analyst Soong Wei Siang wrote in an April 27 note when the stock was upgraded.

Despite the share price’s high absolute amount, total shareholder returns still gained an average of 12.2% a year for the past three years as the price went from about RM54 at end-March 2013 to RM76.90 at end-March this year.

In any case, Nestlé Malaysia’s return on equity (ROE) is among the highest of all Malaysia-listed companies. Its ROE grew from 72% in FY2012 to 79.5% in FY2015, making it one of seven BRC members with more than 50% weighted three-year ROE and one of 13 with over 30% three-year weighted ROE. This is no small feat as 92.6% of the 176 BRC 2016 members have less than 30% three-year weighted ROE.

Nestlé Malaysia continues to strengthen the market position of its brands through proactive management of its value chain. From an input cost perspective, commodity prices in 2015 were more favourable overall compared with 2014, but the company concedes that there are challenges ahead.

“We expect 2016 to continue to be very tough, both locally and globally, particularly with volatile market conditions, global economic uncertainty and more intense competition. Taking this into account, it will not be an easy year ahead, but we are well poised to weather these challenges, due to our strong operations, powerful brands and our top-notch people. We are confident we will be able to continue delivering sustainable growth, even during tough times,” says Nestlé Malaysia managing director Alois Hofbauer.

“It is truly an honour for Nestlé Malaysia to be recognised as one of Malaysia’s biggest and best performing companies. This recognition is a true testament of our unwavering commitment and dedication to bringing ‘good food, good life’ to Malaysian consumers, and a reflection of how we have sustained a legacy of over a century by demonstrating that the successes of business and society can be mutually reinforcing. This is what we call creating shared value, or simply put, — ‘doing well, by doing good’,” he says.