by winston » Wed Jun 17, 2015 7:03 pm
not vested
Top Stocks #1: Procter & Gamble (PG) by Richard Band
If I had to name just one stock that could defy even a major bear market for the Dow, it would be Procter & Gamble (PG).
In April, the Cincinnati-based maker of Crest, Tide, Pampers and Gillette products boosted its dividend for the 59th year in a row. But that’s only the beginning of this stock’s appeal.
CEO A.G. Lafley, summoned out of retirement in 2013, has put the company on a “biggest loser” diet.
PG will shed approximately half its brands (those with the lowest profit margins). When the process is complete (probably by the end of this summer), earnings should accelerate as the company pours cash, for innovation and marketing, into its strongest products.
Don’t fret media reports that PG is disposing some of its beauty businesses, including the recently reported $12 billion sale of the Max Factor, CoverGirl and Wella brands to Coty (COTY).
These brands are valuable, but the competition is excruciating, and margins are under severe pressure. Either Lafley or his likely successor, David Taylor, will be able to put the company’s resources to better use.
Wall Streeters, notorious for their short attention spans, aren’t willing to sit still while Lafley’s highly professional team turns around this aircraft carrier. I’m in no rush, though. During my 42-year investing career, I’ve seen this consumer-goods giant reinvent itself three times — and steam onward to greater glory after each makeover.
Once PG completes the disposal of its low-margin businesses, the stock will take off. Meanwhile, you’re earning a sweet 3.4% cash yield, half again greater than an S&P index fund.
Source: Profitable Investing
It's all about "how much you made when you were right" & "how little you lost when you were wrong"