Count on Procter & Gamble Co (PG) Stock’s Consistency

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Procter & Gamble Co (NYSE:PG) has been around for almost 180 years at this point.

Count on Procter & Gamble Co (PG) Stock's Consistency

Let that sink in. Almost 180 years. Over that course of time, it has been through quite a lot. Texas had recently declared independence from Mexico, Martin van Buren was President of the United States — and PG was selling soaps and other millinery.

While its dividend doesn’t go back that far, it has grown its dividend every year since Dwight D Eisenhower was president. Its rival along the way has been Colgate-Palmolive Company (NYSE:CL), which has been around even longer. More recently the Anglo-Dutch conglomerate Unilever Plc (ADR) (NYSE:UL) has also joined the fray. However, PG towers above its competitors in market cap.

The interesting thing is, Procter & Gamble has cut almost 100 brands since 2014 in effort to focus its energies on its top products. The strategy has paid off. Margins are strong, debt is down and the stock continues to perform well.

All that, and it delivers a rock-solid 3% dividend yield.

Granted, since the Donald Trump Rally has begun, its dividend and slow-but-sure growth may not look very sexy but not everything in your portfolio should be rockets to the moon. And given the continued run up, you can be sure that the good times aren’t going to last forever. We’re already seeing signs of growing volatility, which is a sign that president and Congress’ honeymoon is over on Wall Street and it’s looking for results now, not rhetoric.

The Future of PG Stock

Once significant economic decisions are made in Washington, you can be sure Wall Street will vote with its feet. And that is why stocks like Procter & Gamble are so important to have as bedrocks to any portfolio. It has proven it can grow through the toughest market conditions. And if things get dicey, even the seasoned professionals turn to consumer staples like PG.

There are some challenges in some of its key strategic markets. For example, UL’s Dollar Shave Club is making inroads into Procter & Gamble’s stranglehold on the men’s shaving sector, where PG now has a 65% market share. But in the big picture of things, this isn’t a major concern because it is very good at keeping its costs under control.

For example, in 2012 its costs of goods sold were around $42 billion. This year, they’re around $32 billion, according to company numbers. All that was occurring while the global economy was going through slow to no growth. And it has continued that kind of hard-nosed look at its bottom line to this day.

But it’s not all about cutting products and costs, either. PG is also focused on the next wave of growth. For example, it recently just finished a deal to purchase a start-up laundry business for college students. The operation is already on 23 college campuses around the U.S. and now PG will roll out its Tide University Laundry business to even more locations.

Richard Band’s Profitable Investing advisory service helps retirement savers outperform the market without losing a minute of sleep along the way. His straightforward style and low-risk value approach has won seven Best Financial Advisory awards from the Newsletter and Electronic Publishers Foundation.


Article printed from InvestorPlace Media, https://investorplace.com/2017/04/procter-gamble-co-pg-stock-consistency/.

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