When I was screening on Barchart for large cap stocks hitting the most frequent new highs it was no surprise to see
Proctor & Gamble (PG) near the top of the list. This is a real "what you see is what you get" stock. I respect Value Line's analysis of stocks and have read them for years and this is one of the few stocks they rate 100 for both price stability and earnings predictability. This company is steady as a rock and for income investors it increases its dividend every year without fail. When I read the list of their stable of brand names it is had for me to imagine a supermarket without their products on the shelves. The store would look like a Publix in Miami the day before a hurricane hits -- lots of empty shelves.
The Procter & Gamble Company (P&G) manufactures and markets a broad range of consumer products in many countries throughout the world. Products fall into five business segments: fabric and home care, paper, beauty care, health care, and food and beverage. Today, P&G markets more than 250 products to more than five billion consumers in 130 countries.
Products include the brand names: Always, Head & Shoulders, Olay, Pantene, Wella, Actonel,
Dawn, Downy, Tide, Bounty, Charmin, Pampers, Iams, Pringles,
Gillette, MACH3, Braun and Duracell.
If there is an area of concern for this stock it is that US sales only accounts for 38% of its revenue -- so currency exchange can be a problem. The other area of concern is that Wal-Mart accounts for over 16% of their revenue. If these are problems, then they are problems most companies would be glad to have.
There are other factors that make this proverbial Cash Cow a core holding on many, many portfolios both professional and individual:
Technical Factors:
- 80% Barchart technical buy signal
- Trend Spotter buy signal
- Above its 20, 50 and 100 day moving averages
- 16 new highs and up 7.71% in the last month
- Relative Strength Index 71.73% and rising
- Trades around 65.88 with a 50 day moving average of 62.10
Fundamental Factors:
- Wall Street considers this a core position for both long term growth and income portfolios
- Never misses a dividend increase and pays a 3.3 % dividend
- Brokerage analysts currently have 12 strong buy , 7 buy, 6 hold and no under perform reports issued for their brokers to push to clients
- Sales are expected to increase by 4.30% this year and 5.90% next year.
- Earnings although expected to be down 4.10% this year are projected to increase by 8.60% next year and 8.94% annually for the next 5 years
- In December Goldman Sachs put out a recommendation that says this is a stock to own for the next 5 years
General Investor Sentiment:
- Off the charts with over 9,000 readers of Motley Fool expressing an opinion on this one
- CAPS members vote 7,010 to 219 that the stock will beat the market
- The more experienced All Stars agree 1,787 to 21 for the same result
- Its hard to find a stock that 97% of the individual investors think will beat the market
Summary: This should be a core holding for both growth and income investors. Its sales and income streams are rock solid. It has world wide operations with brand names that are in every ones pantries. If you think the world wide economy is in recover what better way to participate.
Buy or add to your watch lists.
Jim Van Meerten is an analyst for Marketocracy Capital Management. He shares his knowledge and experience from over 40 years of investing in stocks, mutual funds and ETFs on Barchart.com in his daily blog -- Barchart Portfolio Blogs.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.