Reckitt Benckiser is one of the largest pharmaceutical companies in the world but recently the stock price has slumped. Should investors take this as a sign to steer clear of purchasing the stocks or is there more to the story? Although the stock price has dropped recently you have to contrast this with the increase in the percentage of dividends paid out to investors. It has increased by 15% which is a huge margin. This suggests that the company is in excellent financial shape. Since it owns such household names such as Clearasil and Lemsip this is no surprise. So taking these things on board, is it a good investment or not?
Many believe that the reason for Reckitt Benckiser’s losses in the stock market is down to local retailers selling their own branded version of their products. Consumers are wondering why they should pay extra for a well-known brand name where they can buy something which has the same ingredients for a much cheaper price. The economy has changed the way that people think about money. Small savings add up and if consumers can save a few pennies here then it can make all the difference. Unfortunately this also makes a difference to Reckitt Benckiser profits. If you’re interested in day trading for a living then this drop in value won’t make much of a difference to you. It has been a gradual slide rather than a sharp decline.
Overall, Reckitt Benckiser has many good points such as strong dividend payouts and a large market share which point to a good investment. On the other hand, the market that they trade in seems to be changing and this is affecting how much revenue they can actually generate. It’s hard to tell how long this trend will last and if they can see it through. Looking at the big picture the economy is still in turmoil and so for the foreseeable future individuals will be looking to save money anyway they can. If you’re still at the stage where you’re reading stocks for dummies books then there may be better stock options out there for you.
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